Anuj Mehta (Assistant) (221 Points)
03 November 2013
If a partnership firm is paying rent to a partner.
- Is it required to be mentioned in Partnership deed?
- Is it required to register under the state laws?
Saurabh Maheshwari
(B.com,ACA)
(5923 Points)
Replied 03 November 2013
Anuj Mehta
(Assistant)
(221 Points)
Replied 03 November 2013
Agreed.
Say ABC (firm) is paying rent Rs 50000/- to Mr A... without any clause in partnership deed or and other seperate agreement.. will not be a problem to claim deduction under Income tax act..
- it is mandatory under Maharashtra rent control act to have agreement in writing... Its the responsibility of the landlord to have the agreement registered... But i dont know if it will be applicable between firm and a partner...???
satish kumar Chauhan
(accountant)
(347 Points)
Replied 04 November 2013
rent clause is not the part of partnership deed as the partnership deed is define the share ratio etc in the firm activitirs and profit & loss amongast the partners. when the rent deed or rent agreement beetbeen landlord and firm so there is no need to add the rent clause in the partnership deed. but is good for all partners that rent agrrement should be in written.
Mihir
(Wealth Manager)
(5293 Points)
Replied 05 November 2013
What about TDS deduction u/s 194I? Will the firm deduct TDS from 50,000/- pm paid as rent to the partner?
Rent agreement is necessary. For the partner it is an income and has to issue a receipt to the firm.
satish kumar Chauhan
(accountant)
(347 Points)
Replied 05 November 2013
if the amount of rent of buliding, land or furniture is > 180000/- PA than the TDS rate is 10% on the whole amount of rent u/s 194I and in case of machiney etc TDS rate is 2%
Thanks
CAclubindia
