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Query on tds on rent

Jacky (ACCOUNT EXECUTIVE) (219 Points)

18 November 2013

Dear Sir,

I have one query regarding TDS on Rent (as per section 192 I). TDS on rent liability will arise when rent exceeds Total limit of Rs. 1,80,000/- per annum to each payee or co-owner separately. Now, I would like to know that as we have shifted our office in october 2013 and in new office we have to pay Rs. 25000/- per month rent for flat that means Rs. 1,75,000/- for 7 month in this financial year to one co-owner and Rs. 15000/- for 7 months i.e; Rs. 1,05,000/- to one co-owner for rent for furniture and fixture. So, whether we have to deduct TDS or not. There are two owners of flat

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9 Replies

Mihir (Wealth Manager) (5293 Points)
Replied 18 November 2013

It is better to deduct TDS from rent for office even if the amount is less than 180,000 pa for current year, because the rent agreement will not come to an end on 31st March. Regarding the rent on furniture, you may not deduct TDS on that.

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FATEMA (CHARTERED ACCOUNTANT) (719 Points)
Replied 18 November 2013

Sir,

Provided that no deduction shall be made under this section 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 eighty thousand rupees :

If you see the proviso (bold & underlined part) above, aggregrate payment is considered. Hence TDS should be dedcuted in your case as rent is being paid to one person, even if the payments are for two different things.

Regards,

Fatema.

Jacky (ACCOUNT EXECUTIVE) (219 Points)
Replied 18 November 2013

There are two co- owner as mentioned above , one co-owner will take rent on flat for rs. 25000/- for 7 months and other co-owner will take Rs. 15000/- for 7 months for rent on furniture & fittings in this finanacial year. So whether I had to deduct tax or not.

FATEMA (CHARTERED ACCOUNTANT) (719 Points)
Replied 18 November 2013

Do not deduct TDS as the payees are different and they do not cross the threshold limit of Rs 180000/- on individual basis.

Fatema.

Virender Kumar Gupta (Chartered Accountant) (41 Points)
Replied 18 November 2013

Provided that no deduction shall be made under this section 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 eighty thousand rupees :

It says "payee" so tds limit 180000 should be checked per person, so no need to deduct tds.

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CA Rashmi Gandhi (Chartered Accountant) (86308 Points)
Replied 19 November 2013

Under Sec 194I the tax is deductible from payment by way of rent if such payment to the payee during the year is likely to be Rs.180000 or more. If there are a number of payees each having definite and ascertainable share in the property the limit of 180000 will apply to each of the co-owner seperately

amitesh (service) (44 Points)
Replied 19 November 2013

Agree with the replies given above.

you must have two billings in the name of two persons quoting pan of each person separately on respective bills. hence there is no need to deduct tds in your case.