15 April 2012
Sir, Plz tell me whether TDS is to be deducted in the following case or not and if yes then in which section: Payment by a bank as a generator rent @ Rs. 6500 per month and there is a contract with that generator provider.
16 April 2012
TDS rate of 2% will be applicable in your case U/s 194I, since it is plant & machinery.
If the person is employed by the contractor for maintenance and all, then TDS will be deducted u/s 194C but there wont be any change in the rate of TDS and it wont exceed to 2 % in any case .
Any person, not being an individual or a Hindu undivided family, who is responsible for paying to any person any income by way of rent, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of -
(a) Fifteen per cent if the payee is an individual or a Hindu undivided family; and
(b) Twenty per cent in other cases :
Provided that no deduction shall be made under this section 1747gg where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year by the aforesaid person to the account of, or to, the payee, does not exceed one hundred and twenty thousand rupees.
Explanation : For the purposes of this section, - (i) "Rent" means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of any land or any building (including factory building), together with furniture, fittings and the land appurtenant thereto, whether or not such building is owned by the payee;
(ii) Where any income is credited to any account, whether called "Suspense account" or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly.
20 April 2012
This transaction will be covered under both 194C and 194I. Since 194C is a general section adn 194I is a specific section, 194I only will prevail. Hence, TDS to be deduced u/s 194I if applicable.
CAclubindia
