Dear Sir,
Kindly guide for TDS deduction on Hotel Stay.
our engineer are staying in different location for servicing. they are going at site on gap of 15day to 1 Month.
we have to deduct TDS @ 2% or 10%
14 Replies
Anil Dandu
(CA FINAL)
(205 Points)
Replied 15 February 2013
as per 194i(Rent) TDS is apllicable 10% only.it applicable only when rent is exceds 180000 per annum per hotel.
CA Neil Ganatra
(Partner - Gautam Joshi & Co.)
(871 Points)
Replied 15 February 2013
It depends on the contract that you have entered into with the hotel. The contract can be for two types.
1. As per contract, hotel is bound to give room to your engineer despite of the room availability. That means hotel management has to give room to them in whatsoever occupancy position. This contract also mentions specific tariff. If this is the case, then tds would be under section 194 I i.e. rent.
2. As per contract hotel will give room to your engineer only if there is availability of room. They are not bound to arrange for room and provide which was there in first contract. Here the contract will be for tariff only that is if the room is provided then it will be at some specific rate. If this is the contract then it will be covered u/s 194C.
venkatesh
(learner)
(116 Points)
Replied 15 February 2013
Yes, i agreed the statement of CA Neli ganatra.
Biju P
(CA IN PRACTICE)
(71 Points)
Replied 15 February 2013
CA.Biju P
In the given case TDS deduction is depended upon the contract which you have netered with the Hotel. If there is no agreement between the hotel and they are charging the tariff similar to other person, then no need to deduct TDS even though the total aggaragate payment exceeed sthe thereshold limit Rs.180000/-. The contract may be oral or written.
(Guest)
TDS on payments for hotel accommodation [Circular No. 5/2002, dated 30-7-2002]
Payments made for hotel accommodation, taken on regular basis will be in the nature of rent subject to TDS under section 194-I. Where earmarked rooms are let out for a specified rate and specified period, they would be construed to be accommodation made available on "regular basis". Similar would be the case, where a room or set of rooms are not earmarked, but the hotel has a legal obligation to provide such types of rooms during the currency of the agreement.
Often, there are instances, where corporate employers, tour operators and travel agents enter into
agreements with hotels with a view to merely fix the room tariffs of hotel rooms for their
executives/guests/customers. Such agreements, usually entered into for lower tariff rates, are in the nature of rate-contract agreements. A rate-contract, therefore, may be said to be a contract for providing specified types of hotel rooms at pre-determined rates during an agreed period. Where an agreement is merely in the nature of a rate contract, it cannot be said to be accommodation 'taken on regular basis', as there is no obligation on the part of the hotel to provide a room or specified set of rooms. The occupancy in such cases would be occasional or casual. In other words, a rate-contract is different for this reason from other agreements, where rooms are taken on regular basis
(Guest)
| Originally posted by : Ramanuj | ||
 |
Dear All TDS Deducted u/s 194 C. |
 |
Can you tell me when was circular 5/2002 withdrawn. Please provide me the link
Dipjyoti Majumdar
(CA in service & CS. dipmaj@ rediffmail.com )
(3468 Points)
Replied 16 February 2013
I do not think Circular 5/2002 dated 30/07/2002 has been withdrawn. May I ask what made you feel so.
Regards,
CA Ankit Totla
(Practicing Chartered Accountant)
(469 Points)
Replied 16 February 2013
this can be divided into two types :
1) Normal Accomodation contract
this means the hotel would be keeping 1 room or 1 type of room for your company which would be eligible to TDS u.s 194I
2) Rate contract
this means that the hotel would provide you room at a fixed predediced rate. this would be eligible u/s 194C
vivek
(CA Final)
(296 Points)
Replied 16 February 2013
Its 194 I (Rent) and all the people replying 194C are wrong, and totaly agree with CA neil gantra
MANJIT
(manager accounts)
(21 Points)
Replied 18 February 2013
DS Deducted u/s 194 C. i m Manager Accounts in hotel . it is contract between u and hotel so it is apply .
ashish
(M.Com)
(238 Points)
Replied 19 February 2016
in our company organiz one seminar, all over customer stay in this hotel , then company paid to this bill so tds is appliable on 94 C or 94 I
santhosh kumar
(Student CA IPC / IPCC)
(47 Points)
Replied 21 March 2017
Dear All,
But how about the service tax part.
Should we exclude the Serviec tax or exclude the service tax and luxery tax and calculate the TDS?
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