TDS on rent on net or gross amount
Chintanshah (CA Practice ) (122 Points)
10 May 2007ABC Ltd had taken deposit from XYZ Co. and interest paid amounting to Rs. 2,00,000
AT the month end ABC Ltd. raise a note for an amount of Rs. 4,00,000 towards rent of the premises and in the same note it also shown an interest amount Rs. 2,00,000 of deposit and raise a net amount of Rs. 2,00,000
Now, XYZ Co paid an amount Rs. 2,00,000 after deducting TDS on rent on amount of Rs.2,00,000
now a question is
is XYZ Co has to deduct TDS on Rs. 4,00,000 or Rs. 2,00,000 ?
on which amount XYZ Co. has to book expense account i.e. Rs. 2,00,000 directly debited or Rs.4,00,000 debit towards rent and Rs. 2,00,000 credit towards interest ?
give reply after reading question properly.