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Tax treatment- rent paid by developers

VAIBHAV BHATNAGAR (Finance executive) (53 Points)

17 January 2012

ABC LTD is real estate developers. It has launched a scheme to pay rent to customers at a specified rate on per square fit basis till the date of possesion which is expected to be after 3 years. So does the company can pay it as rent as such asset is under construction and can consider it as expenditure in P/L and also at what rate TDS will be deducted.

Your reviews would be highly appreciated.

Regards

Vaibhav Bhatnagar

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2 Replies

CA NEERAJ SHARMA (practice) (408 Points)
Replied 25 January 2012

rent means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of (either separately or together) any,-

(a) Land; or

(b) Building (including factory building); or

(c) Land appurtenant to a building (including factory building); or

(d) Machinery; or

(e) Plant; or

(f) Equipment; or

(g) Furniture; or

(h) Fittings,

Whether or not any or all of the above are owned by the payee;

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U S Sharma (glidor@gmail.com) (21056 Points)
Replied 25 January 2012

Originally posted by : VAIBHAV BHATNAGAR
	ABC LTD is real estate developers. It has launched a scheme to pay rent to customers at a specified rate on per square fit basis till the date of possesion which is expected to be after 3 years. So does the company can pay it as rent as such asset is under construction and can consider it as expenditure in P/L and also at what rate TDS will be deducted. Your reviews would be highly appreciated. Regards Vaibhav Bhatnagar

let the 3 years complete 1st, its just a scheme, and the company is going to pay nothing in real. either they are confident of completion within stipulated time, or they may divert the scheme in legal juglary to get more times.