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Tds on rent

05 September 2014

Mr. A pays 6 months rent in advance to Mr. B at the starting of half yearly i.e., 1st January 2014 Mr. A pays rent(Rs.10,000/- per month * 6 months = 60,000/-) for Jan to June.This payment method is mentioned in Rent Agreement made between two of them. Mr. A deduct TDS on 1st January(60,000/-*10%=6,000/-) for all the payments (as the payment is earlier than Income booking). Now Mr. B is filing Income Tax Return. How much TDS credit he can claim in the FY in question?(3,000/- or 6,000/-). How much Income must he book for this FY?

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2 Replies

shiwani vaishnav singh (Sr. Accountant) (32 Points)
Replied 06 September 2014

Income tax credit can b availed according to the financial year I.e jan to march 14 becoz tds filed accoding to the qtr and F.Y.

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CA Gaurav Goyal (CA) (86 Points)
Replied 06 September 2014

Ok this point may be genuine.. that Mr.A will book expense for only 3 months and remaining 3 months will be advance paid at the year ending. Mr. B will also book income for 3 months and remaining will be advanced received. And accordingly Mr. A will file return with 3,000/- as TDS deducted for this year and remaining 3,000/- will be filed in the quarter ending June 2014. For this Mr. A will have to pay TDS in 2 challans for 3 - 3 months separately.

!!!!Great Suggestion by Expert Shivani.!!!!

But in my case Mr.A has filed TDS Return with a TDS booked in the quarter ended March 2014 of Rs.6000/-. Mr. B has booked income of Rs. 30,000/-(i.e., for only 3 months). Mr. B cannot claim TDS more than on income booked in this year, hence only 3,000/- is allowed. Now how to claim the another 3,000/- of TDS..