TDS on electricity component of the agreement

TDS 1460 views 4 replies

Kalyan Kumar V

Student

30 Points Joined June 2008

Dear all,

I am working in an organisation, in which the premises is leased out on a monthly basis and the agreement specifies that the electricity bill be paid to the lessor of the premises @ Rs. 10.00 per unit.

We are deducting TDS on the rent under section 194 I of the Income Tax Act, 1961. But what i would like to ask you here is that should we deduct TDS on the electricity component also? If so, at what rate should we deduct TDS ? Should it be done under Section 194 I or under section 194 C of the Income Tax Act.

For clarity, let me tell you that both the rent per square feet and the electricity rate per unit is specified in the contract agreement with the vendor.

So, please clarify

Replies (4)

Ram Avtar Singh

Nagari Sultanpur U.P.Delhi

15531 Points Joined March 2007

seperet reimbursment its. its not rent. TDS not applicable.

Kalyan Kumar V

Student

30 Points Joined June 2008

Dear Ram,

This is not a reimbursement as her is not acting as a pure agent in this case.

We are not paying him on production of the electricity bill given by the Electricity Board.

So, are you sure that we are not liable to deduct TDS on the above case...?

Krutesh Patel

ACA

727 Points Joined July 2009

If your lessor raises seperate bill for electric expense reimbershment and this bill is supported by actual bill of electricity, then you shall not deduct TDS on it.

But if he raises one consolidated bill for the same, you shall deduct TDS u/s 194I as if it is rent for premises.