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TDS ON RENT

deepak (CWA STUDENT AND SERVICE) (200 Points)

29 April 2010

Hi All,

please help me, my compay is paying office rent, and electricity and water bill to the owner of the building, we deducted tds u/s 194I when we pay rent to the owner, should i deduct TDS also on electricity and water bill when i pay this amt.to the owner of the building.

thanks

Deepak Mishra

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8 Replies

Rachit (Analyst) (913 Points)
Replied 29 April 2010

No TDS is required to be deducted on electricity & water charges reimbursements to the owner, since it is not his income. He is collecting the same on behalf of the service authorities and paying them back

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Amir (Learner) (4016 Points)
Replied 29 April 2010

Dear Deepak,

Agree with Rachit,

Inference can be drawn from Circular No. 718 -

If the municipal taxes, ground rent, etc., are borne by the tenant, no tax will be deducted on such sum.

Rachit (Analyst) (913 Points)
Replied 29 April 2010

Dear Deepak

Tax is required to be deducted at source only on those payments which forms part of the income of the other person and this is a universal rule for all the TDS provisions. Hence no TDS on EC and WB as it does not form part of his income.

Hope it is clear now.

DT Fundas - Tarun rustagi ( Author) (1150 Points)
Replied 29 April 2010

dear deepak

tax will not be deducted on payment of water charge or electricity whether it forms part of rent or not.rent includes advance rent,ware housing charges,non refundable deposits bcoz these items are to be included in the income of deductee.but water charges and elec. etc does not form part of the income of deductee and agree with friend rachit completly