Hello People,
I recently came across a confusing situation regarding TDS to be deducted while doing Statutory Audit of a firm.
The firm has deducted TDS on Rent @ 2% on hiring of a Mandap. I Would like to know whether the treatment is correct or the TDS is to be deducted @ 10%.
Also, if anyone could help me with the definition of 'Rent', it would be great.
Thank you.
Dear Samarth
"Explanation (i) to section 194 I
Rent means any payment, by whatever name called, under any lease, sub lease, tenancy, or any any other agreement or arrangement for the use of (either separately or together) any
a) land or b) building (including factory building) or c) land appurtenant to a building or d) machinery e) plant or f) equipement or g) furniture or h) fittings,
Whether or not any or all of the above are owned by the payee."
TDS rate 10% in case of land building furniture or fittings for all person.
TDs rate 2% in case of Machienery or plant or equipements.
in your case TDS rate should be 10%. There is no p&M & equipment involved in mandpa hiring. instead mandap includes hiring of space/ furniture/ fittings in common paralanance. Please check the service hired.
thanks
Sanjay
I think to be on the safer side deduct TDS @ 10%. As there is no loss in it. The deductee will get the credit.
2% of contractor
as it not fall under 194I
U should see billing structure prperly
then indentify nature of service
for indivudual only 1% in all the cases
thanks
CAclubindia
