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tds on rent

Srinivasu (article) (71 Points)

25 June 2009

rent deposite refundable is liable to tds ple tell me urgent

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12 Replies

Ajay Chaudhary (CA) (63 Points)
Replied 25 June 2009

I think TDS provisions are applicable to "Rent", and not 'Deposits', No TDS on rental deposits.

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Mehul Lodaria (CA) (69 Points)
Replied 25 June 2009

refundable- Not

non refundable liable but on propotnate basis

CA. Rashi Goyal (Chartered Accountant) (512 Points)
Replied 25 June 2009

Refundable rent deposit is not liable to TDS. No TDS is required to be deducted on refundable deposit of rent.

CA Devanshi Gandhi (Ajani) (FCA DISA Mcom CIFRS & LLB) (9058 Points)
Replied 25 June 2009

not applicable

Deepak Tapse (Accounts Manager - Taxation) (1771 Points)
Replied 26 June 2009

TDS is applicable only on rent not on deposit.

Originally posted by :Srinivasu

rent deposite refundable is liable to tds ple tell me urgent

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CA Manish Sharma (Chartered Accountant) (57 Points)
Replied 26 June 2009

No TDS is deductible if tenant makes refundable deposit with landlord. Further, if such deposit carries interest on such refundable deposit, then TDS is to be deducted and provision of Section 194A will be applicable.

(Guest)

The tax is to be deducted from the actual payment and there is no need of computing notional income in respect of a deposit given to the landlord. If the deposit is adjustable against future rent, the deposit is in the nature of advance rent subject to TDS.

In cases where the tenant makes a non-refundable deposit, tax would have to be deducted at source as such deposit represents the consideration for the use of the land or the building, etc. and therefore partakes the nature of rent as defined in section 194-I. If however the deposit is refundable, no tax would be deductible at source. If the deposit carries interest, the tax to be deducted on the amount of interest will be governed by section 194A.