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Urgent-tds on rent recovery

Huzefa Hussain (Chartered Accountant) (143 Points)

19 January 2013

In a construction contarct the contractee gives space/land for temporary site installation & recoverd the charges for the same from the work done bills of the contractor.

Is the contractor liable to deposit TDS on such recovery and under which section?

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4 Replies

CA Shruti Gupta (CMA FINAL CS Final) (1434 Points)
Replied 19 January 2013

IN MY OPINION IT SHOULD BE CHARGED AS TDS ON RENT U/S 194I

‘Rent’ means any payment, by whatever name called, under any lease, sub-lease, tenancy or 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 (including factory building); or

(d) Machinery; or

(e) Plant; or

(f) Equipment; or

(g) Furniture; or

(h) Fittings

Whether or not any of or all of the above are owned by the payee Explanation (i)to Section

194I.Subletting is also covered.

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Deepak Baghel (Accountant) (74 Points)
Replied 19 January 2013

No there is no TDS liability of Contractor because there is not deemed income concept in the hand of contractee. The Conractee adjusting the amount from contract value. If they will not adjust from contract value then contract will liable to duduct tax u/s 194 I.