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Sec 194-I

prateek rijwani (Industrial Trainee) (125 Points)

23 December 2010

i wanna know whether sec 194 I or sec194 C wil will be leived on ameneties portion of composite rent to a same party but the party has raised different bills for rent portion & ameneties portion..........

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10 Replies

Madhusudan Kabra (knowledge seeker) (1779 Points)
Replied 23 December 2010

The amenities part will be taxeble in income from other sources if it is seprable from bill raised for property let out . therefore TDS for amenities to be deducted as per 194C

refer case law for its taxebility "Shambhu investment P ltd. Vs. CIT -263 ZITR 143 (SC)

Regards

M.S. Kabra

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prateek rijwani (Industrial Trainee) (125 Points)
Replied 23 December 2010

Originally posted by : Madhusudan Kabra
	The amenities part will be taxeble in income from other sources if it is seprable from bill raised for property let out . therefore TDS for amenities to be deducted as per 194C refer case law for its taxebility "Shambhu investment P ltd. Vs. CIT -263 ZITR 143 (SC) Regards M.S. Kabra

my ques is not where it will be taxable.......it is which sec is levied in this....is it 194 C or 194 I

Madhusudan Kabra (knowledge seeker) (1779 Points)
Replied 23 December 2010

if it is sepratly taxable then can not be said as rent .....ttarget='_blank' rel='nofollow' hrefor 194C

Regards

M.S.Kabra

1 Like

Madhusudan Kabra (knowledge seeker) (1779 Points)
Replied 23 December 2010

can u pls provide details about what amenities you are providing in seprate bill ???/

Regards

M.S.Kabra

prateek rijwani (Industrial Trainee) (125 Points)
Replied 23 December 2010

Originally posted by : Madhusudan Kabra

can u pls provide details about what amenities you are providing in seprate bill ???/

Regards

M.S.Kabra

we have taken a premises on lease from DLF and they charge us for maintenance charges seperately...............According to me it should be also under 194 C but our CFO is saying it is 194 I.......

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Madhusudan Kabra (knowledge seeker) (1779 Points)
Replied 23 December 2010

Dear Mr. Prateek ,

Pls make it clear with your boss about what rent includes and what excludes as per defination given in Section 194 I

Defination is as follows :

the term rent means any payment under any lease, sub lease, tenancy or any other agreement or arrengment for the use of (either seperatly or together) any: a) Land b) factory building C)land appurtent to a building ( including factory building); Machinary e) Palnt f) equipments;g) furniture h)fittings, whether or not any or all of the above are owned by the payee .

Regards

M.S. Kabra

1 Like

JAS Diaz (Finance Professional) (22 Points)
Replied 17 November 2012

Our company owns an I.T Park and we lease out space to various IT firms. We charge rent and tenants deduct 10% TDS. This is Ok with us. We also, by a separate agreement, maintain the IT Park and provide security, house-keeping, electricity air-conditiong, water suppy and maintain STP etc. We separately bill tenants based on actual expenditure ( we provide details of bills of various vendors) and this amount varies month-to-month based on actual expenditure. This is a separate bill called maintenance bill. Some tenants deduct 2% TDS but few other tenants insist on deducting 10% TDS. Since the bill is based on actual expenditure we run into loss with TDS. E.g we spent Rs 1000/- on maintenance and get reimbursed Rs 900/- only. We can not sustain this business model.

I saw a similar query and reply citing Shambu Investments Vs, CIT (SC) given in the forum. I went through the actual judgement and it is just opposite of what is given in the forum. It is not clear. The SC says the amenities income will be treated as business income for tax.

Can some one clarify the exact position pl. Also suggest how to get out of this messy situation.

(Guest)

I am suggesting this not as an expert But after hearing so many instances like the above can't find a practicable solution suggest the following till you find a legal route to avoid ....

..i.e. for every Rs.100 you want to collect charge 102.05 they deduct 2% on this i.e 2.05. Then you will be realising the amount spent. Then regarding TDS portion ...claim refund from the dept. Whenver you get you distribute the same to those who deducted...in that particular month reduce the bill to that extent. OR treat it as a fund for repairs etc.