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Is rent on Genset liable to TDS

Sourabh (67 Points)

10 May 2007

Suppose a company pays rent on genset @ 14000 pm, party is also charging service tax on above amount.
Is this amt liable to TDS.
If yes, under which section

Plz reply in support of specific circulars or notification (if any)

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9 Replies

Natrajan (19 Points)
Replied 10 May 2007

S.194I pertains to only rent for space and hence rent for genset is not covered it is more of a "hire charges" for use of genset than "rent"

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Natrajan (19 Points)
Replied 10 May 2007

S.194I pertains to only rent for space and hence rent for genset is not covered it is more of a "hire charges" for use of genset than "rent"

Vk Duggal (320 Points)
Replied 10 May 2007

Parliament has already passed the bill but is not yet signed by the president. In the Finance Amendment Bill, there is provision for TDS on the rent of machinery etc.

Pawan Kapur (29 Points)
Replied 10 May 2007

In case, generator has been taken on hire and it is being operated and run by the service provider, tds is chargeable u/s 194C, since annual charges are above Rs.50,000 per annum.

Amendment regarding rent on machinery still awaits Presidential Assent and will be applcable in cases where only machinery is given on hire and is not operated by the genset provider.

Manjunath (37 Points)
Replied 10 May 2007

Dear Sir,

Tds is applicable w.e.f 13.07.2006 on rental charges of  genset also including service tax amount. This is subject to limits as prescribed in sec.194-I

Hence, please go through the Taxation Laws(Amendment) Act,2006.

Further, if you have any  doubt, please give me the full details.

Thanks & Regards

MANJUNATH
m.chanageri @ yahoomail.com

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Misha (14 Points)
Replied 10 May 2007

YES, AS PER NEW AMENDMENT ON TDS ON RENT, TDS IS APPLICABLE ON PLANT & MACHINERY. THEREFORE IT COMES IN PREVIEW OF 194I

Mahendran P Nambiar (SR.OFFICER-ACCOUNTS) (22 Points)
Replied 19 February 2010

Under Section 194 I Payment of Rent for use of Plant , Machinery or Equipment upto Rs.1,20,000/- for Individual as well as other than individual is 2%.

CA RITESH JUNEJA (CA, DISA,B COM) (151 Points)
Replied 20 February 2010

RENT FOR GENSET IS LIABLE TO TDS UNDER SECTION 194C @ 1% FOR INDIVIDUALS AND HUF DEDUCTEES AND 2% FOR OTHER DEDUCTEES. ITS PURELY A CONTRACT AND NOT THE Plant , Machinery or Equipment BEING USED IN BUSINESS.

Amol Gopal Kabra (CA,CS,DISA) (Practicing CA) (8539 Points)
Replied 20 February 2010

Rent on genset is not under 194C. The Section 194 C has clearly specified the scope of Contracts for the purpose of deduction of tax under that section. However, as per ammended provisions, rent paid on genset shall be liable for tax deduction at source under section 194-I and tax shall be deducted accordingly at the rates specified therein.