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TDS Deducted

CHEZHIYAN (SENIOR FINANCIAL ANALYST) (2517 Points)

29 December 2008

One of My Client deducted TDS for Rent from Director.....

But Rent Payable is only 24000 P.A...

Deducted and paid upto 6 Months...........

Tell me What to Do

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3 Replies

Prabeer (B. COM (H) CA & CS Final) (5484 Points)
Replied 29 December 2008

Mr. Chezhiyan go through the following text:

(1) Any person, other than an individual or a HUF (here individuals & HUF whose books of accounts do not need to be audited U/S 44AB), who is responsible for paying to a resident any income by way of rent shall deduct income tax U/S 194I at the rate of:

(i) 15%, if the payee is an individual or HUF, and

(ii) 20% in other cases.

(2) However, the rate of tax deduction has been reduced to 10% with effect from 1.6.2007 in respect of rental payments for use of plant, machinery and equipment, irrespective of whether the payee is an individual/HUF, firm, company or any other person.

(3) This deduction is to be made at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of cheque or draft or by any other mode, whichever is earlier.

(4) No deduction need be made where the amount of such income or the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year to the account of the payee does not exceed Rs.1,20,000.

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Prabeer (B. COM (H) CA & CS Final) (5484 Points)
Replied 29 December 2008

Please make your query more clear & try to explain further.

I'm considering your case as the Director has let-out a property to your client Company, and the client company has deducted TDS from the payment of rent to the director .

As TDS has already been deducted the client company (deductor) can give a FORM 16A to the director (deductee) stating the TDS deducted and the TDS so deducted will be treated as a advance tax and will be held as a credit against the PAN of the director (deductee) for that Financial year.