B. Umapathy (student) (405 Points)
11 February 2011Please give the solution for the following case
X a firm occupied commercial property for monthly rent of Rs.40000/-, jointly held by A, B, C & D (equal share).
1.Is TDS applicable? (Since the property held by A, B, C & D jointly, maxi. limit of Rs.180000/- applicable to each of the co-owners)
2. If rent received through a single Cheque for Rs.40,000/- maximum limit of Rs.180000/- applicable to each of its co-owners.?
Pankaj Arora
(Learner)
(3134 Points)
Replied 11 February 2011
TDS should not deduct because shares of rent of each owner would be 1.20Lakh.
Srinivas Reddy
(CA , MBA)
(59 Points)
Replied 11 February 2011
Dear frnd,
S.194I clearly specified that, in case of rental property held by more than one owner the limit Rs.180000/- for each of them but not for all of them.
In this case A,B,C & D are co-owners rental comes to Rs.120000 p.a., so tds providions does not apply here because for each individual limit does not exceeds Rs.180000/-.
Even though they received a single cheque tds provisions does not attract if they maintain joint bank account.
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 11 February 2011
follow the rent bill style and mode, if severe than to be treated in 4 parts if in single name or ABC & others then single identiry , TDS would go to 1st holder.
CA Ganesh Karthik
(Chartered Accountant)
(368 Points)
Replied 11 February 2011
Have a look at the rent agreement. If the rent agreement says that it should be equally distributed, TDS will not apply. But mere payment if it is given separately without the rent agreement specifying so, TDS will be applicable.
Manoj BG
(Tax Professional and in Service)
(1795 Points)
Replied 11 February 2011
Fully agreed with Ganesh.
Thanks and Regards,
Manoj B. Gavali
| Originally posted by : Manoj B. Gavali | ||
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Fully agreed with Ganesh. Thanks and Regards, Manoj B. Gavali |
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Srinath Shenoy
(Senior Accountant)
(31 Points)
Replied 12 February 2011
If the rent agreement is made in the name of firm's (X's) name, then the TDS will be applicable, irrespective of how many owners jointly own it.
pankaj kumar alok
(professional)
(26 Points)
Replied 12 February 2011
Dear Freind,
The maximum limit of deducting tax on Rent U/s 194I is Rs. 1,80,000 for the PY 2010-11.
The Maximum limit is for each recipient i.e. if Payment to each co owner does not exceeds the maximum limit of Rs. 180000 in a previous year then there is no need to deduct TDS.
Coming to next if payment is made through single cheque of Rs. 40000 p.m. then TDS have to be deducted.
Neerav Karia
(Article Assistant )
(68 Points)
Replied 13 February 2011
As u said earlier,the property is divided in equal parts...that means every partner will get 1.2 Lakhs on yearly basis which is under d lmits mentioned in the section of Rs.1.8 Lakhs...
So you don't need to deduct tax at source...
J.RANGASWAMY
(SENIOR ASSISTANT)
(29 Points)
Replied 14 February 2011
THE RENT AGREEMENT BETWEEN THE FIRM X AND THE FOUR CO- OWNERS HAS TO BE SEEN..IF THERE ARE A NUMBER OF PAYEES/CO-OWNERS EACH HAVING DEFINITE AND ASCERTAINABLE SHARE IN THE PROPERTY THE LIMITS OF RS 1,80,000 WILL APPLY TO EACH OF THE CO-OWNERS SEPARATELY.IN THAT CASE TDS NEED NOT BE DEDUCTED.
CAclubindia
