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tds on rent in case of joint ownership

abid (accountant) (169 Points)

26 September 2007

hi,

the co. pay 12000/- as rent for a commircial property in the name of one person(not a co.) while the ownership is joint and both the owners are agree with issuing the cheque in favour of one person. whether we should deduct tds if yes on what % and under which condition..Actually we issued him PDC and not deduct TDS in financial year 2006-07

THANKS AND REGARDS

Abid Hussain

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7 Replies

CA. Dashrath Maheshwari (TaXpert) (15103 Points)
Replied 26 September 2007

If you have not deducted TDS then the entire amount of rent will be disallowed

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MAHENDRA IYER (SERVICE) (315 Points)
Replied 26 September 2007

The limit prescribed u/s 194I is Rs. 120,000/-. It has been stressed in the provisions that if the aggregate payment for the financial year, which is paid or likely to be paid exceeds Rs. 120,000/-, tax has to be deducted by the payer. On the other hand circular 715 dt 8/8/1995 states that if there are number of payees, each having definite and ascertainable share in the property, the limit of Rs. 1.20 lakhs will apply to each payee/co-owner. In your case since the payee is only one individual Tax is required to be deducted at 15.450% in case of income of the payee less than 10 lakhs and 16.995% in case income is greater than 10 lakhs.

Indira Singh (Chartered Accountant) (87 Points)
Replied 26 September 2007

my question is if this will be the case of co then how will we proceed.

CMA Gul S (Program Manager) (5910 Points)
Replied 26 September 2007

Hi Indira, Sorry but are you refering to the Original Question for the case relating to FY 2006-07

(Guest)

Dear Sir thanks for reply but what we should do while the date and time to deposit the tds has elapesed wehether we should deposit the same with interest and penalty. and then whether it will be allowed.

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MAHENDRA IYER (SERVICE) (315 Points)
Replied 27 September 2007

Since u have not deducted tax you will have to deduct the same now and deposit the same with interest. The expenses will be allowed in the year in which tax has been deducted and paid to Govt. treasury. But the interest will not be an allowable expenses.

Mamta Kapadia (2 Points)
Replied 15 February 2019

PLS LET ME KNOW THAT IF AN INDIVIDUAL IS PAYING RENT TO CO-OWNERS (I,.E. 2 PARTIES) AND RENT PAID TO BOTH THE PARTIES INDIVIDUALLY IS BELOW 50,000 BUT JOINTLY IT IS ABOVE RS.50,000/-. IS TDS U/S.194IB APPLICABLE. IS THE TENANT LIABLE TO DEDUCT TDS.