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TDS u/s 194I

Ajeet (CA) (239 Points)

27 February 2008

TDS is deductible u/s 194I from the rent of Land, Building, Machinery, plant, etc. However it will be deductible only if the rent paid or payable during a previous year exceeds Rs. 1,20,000.

My question is that whether this limit is applicable to all assets put together or individually to each?

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10 Replies

M.Sriram Shenoy (CA Final) (814 Points)
Replied 27 February 2008

TDS has to be deducted when rent paid on EACH OF THE ASSET exceeds the limit of Rs.120000.00 and not cumulatively.

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adnan (Article) (241 Points)
Replied 27 February 2008

i agreed with Sriram

RITESH KHANDELWAL (Corporate Taxation) (168 Points)
Replied 27 February 2008

well ...I think its on cumilitive basis, if u r paying the rent to single entiy and no matter what u r letting out.

M.Sriram Shenoy (CA Final) (814 Points)
Replied 27 February 2008

Mr.Ritesh, I dont see the word "SINGLE ENTITY" in the question.

CA. Kirti S. Ganatra (Service) (1461 Points)
Replied 28 February 2008

For individual rent contract

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RICKY (ACA AICWA CS (Executive Program)) (123 Points)
Replied 28 February 2008

Hi Ajeet,
the TDs on rent will attract only if the payment of rent on any one or more assets to a single person exceeds Rs.1,20,000/-.

CA. Gurdeep Singh Chawla (C A) (7080 Points)
Replied 28 February 2008

Limit is applicable individually.

CA SASHIKANT PATI (Job) (159 Points)
Replied 28 February 2008

Suppose Mr A has two houses . He has given one house to Mr X on rent of Rs. 11000/- pm and another house on rent Rs.9000/- pm . Now Mr X shall deduct TDs on rent ,because total rent pais exceed Rs.120000 PA. Mr Y will not deduct TDS.

Ramakrishna (Financial Executive) (438 Points)
Replied 29 February 2008

Dear Friends,

The words in Section 194I speaks about the amount paid by way of rent by one person to another and speaks about aggregation of such amounts also. Such being the case, it appears that all items of rent payable to a single party, have to be aggregated to reckon the limit of Rs. 1.2 Lakhs for making TDS. It may not be fair, if aggregate payments exceeding Rs. 1.2 Lakhs are omitted for the reason that each of the individual items are falling short of the overall limits. Infact, TDS itself is a notional estimated tax component, and is made only for the purpose that the recepient has to account for those receipts at the time of filing his individual returns and for enabling the government to monitor the same.

Good Bye! Cheers!!

Ajeet (CA) (239 Points)
Replied 29 February 2008

Ya, I also believe that this limit of Rs.120000 is applicable to all assets in aggregate. In recent May,07 exam of Final also this view has been taken. Thanks to all.