Tds u/sec 194i (rent)

A company paying Rs 20000 pm to its landlord for building and Rs 5000 pm for Generator, there is 2 seperate agreement for building and machinery.
Now company is deducting TDS on building rent @ 10%. shall company also deduct TDS on machinery rent ?  Please explain.

Replies (6)

The section holds that "use of machinery or plant or equipment". Hence usage of generator will get covered under equipment though it may not get covered under plant or machinery which varies according to the circumstances. So TDS needs to be deducted at 2%.

2% TDS will apllicable on plant&machinery.

Yes..it should deduct TDS on mach..but first u should see whether there is any threshold limit for mach.(like for bldg rent 180000 p.a.) 

I think the limit of Rs. 1,80,000 is a combined limit... So in case the total payment expected to be made is more than Rs. 1,80,000 tds on rent is liable to be deducted.

TDS on Building @ 10%

TDS on Generator @ 2%

1) Rent is Taxable Upto 180000 under 194I

In your case its 20000 x 12 which is crossing the above limit

2) and now Machinery is also Upto 180000 Under 194I

In your case its 5000 x 12 which is below the above limit

 

Now its your decision if you are combining the amount 1 will apply

if paying separetly then omit Machinery for TDS calculation....

I think Prashant and Neha are right. as per IT act TDS is applicable when rent exceeds Rs 180000 pa. whether combined or individually 

Thanks to all.

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