Company A & B are group company. Company A is paying Rent of whole premises to Landlored on which TDS is deducted.Out of whole premises the B is occuping the 40%, the rent of which is recovered by A from B On cost to cost basis.Will B liable to Deduct TDS on amount of rent paid to A?
2 Replies
Venkatesh Rao
(Service)
(135 Points)
Replied 22 December 2008
No, since this is purely a reimbursement and not RENT payment to A.
If there was any clause in the aggrement authorising the company to sub-lease the part of its premises to any body, then as per the agreement entered between A and B the payment made to A by B would have attracted TDS on rent.
since the Company A is paying the entire rent it means there is no such agreement between Company A and B. It is just an reimbursement and NO TAX to be deducted.
S.Vijay Anandh
(Analyst - Finance)
(112 Points)
Replied 22 December 2008
Yes. As per Sec 194I TDS needs to be deducted for the said payment
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