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Will the following attract TDS

25 March 2010

here is a case: rent for a commercial premises is being paid without deducting TDS. the payer contends that as the rent is being paid to 4 co-owners of the premises and the amount being less than the qualifying amount, tds is not attracted.Is this contention eligible or should the payer deduct TDS. Also specify whether such payment be made after deducting edu. cess and higher edu. cess?

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2 Replies

CA Babit Khurana (learning is my passion) (338 Points)
Replied 25 March 2010

For rent qualifiying Limit to deduct TDS is Rs 120000, this limit of Rs 120000 applicable to each co-owner sepratly if each having definate and assertainable share in property.

1) If assesse is individual/ huf who are subject to Tax Audit under section 44AB of income tax Act and it qualify the max limit then the assesse is liable to deduct tds.

2) If assesse is company then they are liable to deduct Tds in any case, if it qualify the max limit.

3) If rent paid to Individual then it should be without surcharge, e.cess and shec, but if paid to company then e.cess and shec should also deduct.

4) if transaction happning before 30.09.2009 then rate of TDS for co:-22.66(inclusive of surcharge and e.cess), and in any other case:-16.995 (inclusive of surcharge and e.cess)

- if transation happen afer 30.09.2009 then @ 10% is applicble for all but (surcharge and e.cess is applicale only in case of company)

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Rachit (Analyst) (913 Points)
Replied 26 March 2010

Originally posted by : Babit Khurana
	- if transation happen afer 30.09.2009 then @ 10% is applicble for all but (surcharge and e.cess is applicale only in case of company)

From 01/10/2009 S.Charge is applicable only in the case of companies where the income subjected to TDS in case of domestic company exceeds Rs. 1 crore.

Ed. cess & SHE cess is not to be deducted in case of TDS.

from 01/07/10 TDS limits u/s. 194I have been increased to 1.80lacs from 1.20lacs pa