We have an query regarding the TDS on rent paid u/s 194I.
Presently we are operating from a business center since the beginning of May'16. The business center provides two types of invoice for a particular month -
1) Occupancy Charges of Room (which is fixed and payable in the previous month by 25th.
For e.g. the Occupancy Charges for the Month of January'17 to be paid by 25/12/2016, like this way).
2) Other Service Charges (which includes Parking Charges, Overtime charges if any, Cabin booking charges for meeting if any and this amount is variable and payable within the 10th of the next month.
For e.g. the Other Service Charges for the month of December'16 to be paid by 10/01/2017, like this way).
Now, till November'16 we were thinking that we would leave this office and transfer our operations to any other place, hence calculating the expected total rent payable to DBS House it was observed that it would not exceed the limit specified U/S 194I,i.e., Rs.1,80,000/-, so no deduction of tax was required.
But, now as per the circumstances, we have to remain here for at least upto March'2017. Hence, total rent paid or payable is likely to exceed Rs.1,80,000/- during the FY 2016-17.
In this situation our queries are -
a] Whether Occupancy Charges and Other Service Charges both are liable to deduct tax or only the Occupancy Charges?
b] Whether we should deduct tax from the next payments normally @ 10% or we have to deduct the tax at higher rate for the earlier months' payment also (for which we haven't deducted tax) from the next payments?
c] Is there any other particular procedures that we need to comply in this regard?
CAclubindia
