Deepak Tapse (Accounts Manager - Taxation) (1771 Points)
20 February 2013In current year FY 12-13 my company paying rent Rs. 15000/- pm i.e. 1.80 Lakhs. In the month of Feb. we are paying Rs. 1 Lakh as security deposit which will be deducted from next 24 months (100000 / 24 = 4167/-) from his rent charges. i.e. Rent Rs. 16500/- less 4167/- = 12233/-.
My query is, in current year i have to deduct TDS on Rs. 2.80 Lakhs (1.80 + 1.00) or not.
Thanks
CA Gaurav Kaushik
(Practicing Chartered Accountant)
(123 Points)
Replied 20 February 2013
Deepak Gupta
(CA Student)
(15922 Points)
Replied 20 February 2013
| Originally posted by : Deepak Tapse | ||
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In current year FY 12-13 my company paying rent Rs. 15000/- pm i.e. 1.80 Lakhs. In the month of Feb. we are paying Rs. 1 Lakh as security deposit which will be deducted from next 24 months (100000 / 24 = 4167/-) from his rent charges. i.e. Rent Rs. 16500/- less 4167/- = 12233/-. My query is, in current year i have to deduct TDS on Rs. 2.80 Lakhs (1.80 + 1.00) or not. Thanks |
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In your case, deposit is adjustable against future rent. Therefore, deposit is in the nature of advance rent subject to TDS.
Circular : No. 715, dated 8-8-1995. (Refer Q.22)
[Question 22 : Whether the rent paid should be enhanced for notional income in respect of deposit given to the landlord ?
Answer : The tax is to be deducted from actual payment and there is no need of computing notional income in respect of a deposit given to the landlord. If the deposit is adjustable against future rent, the deposit is in the nature of advance rent subject to TDS.]
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