Tds on rent

Page no : 2

K.R.Vishnoi (Student(B.Com+CA)) (92 Points)
Replied 13 January 2012

if 5 % does not exceed then 80000

tds will not not be deducted

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Divya K S (CA) (289 Points)
Replied 13 January 2012

@ Mayank: Since the 5% above Rs. 25,00,000 is been paid for the use of building, it falls under the perview of rent & not commission. You need to deduct tax under section 194I itself.

1 Like

Prity (Partner) (70 Points)
Replied 13 January 2012

It should be categorised under rent as it is for the usage of the building.

1 Like

C.A. Sandeep Wawhal (CA, PGDFM, BCom) (1831 Points)
Replied 13 January 2012

Prity, There is not mentioned wheter rent is paid for usage of building

karan jit singh (Consultant) (1299 Points)
Replied 14 January 2012

rent” means any payment, by whatever name called, under any lease,
sub-lease, tenancy or any other agreement or arrangement for the
use of (either separately or together) any,—
(a) land; or
(b) building (including factory building); or
(c) land appurtenant to a building (including factory building); or
(d) machinery; or
(e) plant; or
(f) equipment; or
(g) furniture; or
(h) fittings.

Therefore 194I is applicable in the above case..
TDS = 10% of rent

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karan jit singh (Consultant) (1299 Points)
Replied 14 January 2012

N PLS MENTION RENT FOR WHAT>????

shanil jain (CHARTERED ACCOUTANCY) (60 Points)
Replied 15 January 2012

the 5% clause in the agreement is just to quantify the amount of rent.

this clause shall not change the nature of the payment ie. payment to use the building.

this payment shall not be treated as Commission coz it not for procuring u any service or goods. the rate is just to quantify the amount of rent payble.

hence the payment would be covered under sec 194I and not 194H.

Last but not the least, for mandatory tds deduction the limit of of Rs. 1,80,000 should be crossed, otherwise no need for tds.

:-)

CA. Ranjit Yadav, FCA (Chartered Accountants) (40 Points)
Replied 07 March 2012

It depends up on agreemnet between you and landlord. if it is written in the rent agreement than you have to deduct TDS on entire amount including 5%,according to Section 194I. if not written in the agreement you have to deduct TDS as per Section 194H.