Tds on rent

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Sabareesh (Querist)
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28 November 2014 Please advise whether TDS is to be deducted?

Case 1: Mr A entered into an agreement with Mr B for rent - Rs.10,000/- & amenities - Rs.7000/-.

Case 2: Same as case 1, but Mr A entered with Mr B in two separate agreements i.e one for rent & the other for amenities.

In which case, TDS need to be deducted?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 November 2014 TDS need to be deducted in both the cases as payment is to a single person. Payment for amenities included under rent.

Sabareesh

Sabareesh (Querist)
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28 November 2014 Sir,
So, irrespective of agreement, if payment is made to the same person, TDS has to be deducted?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 November 2014 Yes .........................

Sabareesh

Sabareesh (Querist)
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28 November 2014 Sir,
In that case, if i enter into an agreement with Mr A at place X & i enter into another agreement with same person at place Y?

Im paying Rs.10,000/- for Place X & Rs.9,000/- for place Y?

Now is it applicable?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 November 2014 There is no need to deduct TDS u/s 194I under below mentioned circumstance:
(i) Where aggregate amount of rent does not exceed Rs. 180000/-

When the aggregate amount exceeds Rs. 180000 TDS applicable.

Sabareesh

Sabareesh (Querist)
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28 November 2014 Aggregate amount of rent related to a premises or building (or)

Aggregate amount of rent paid to the person or lessor

Plz clarify this

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 November 2014 Aggregate amount of rent paid to the person.

Sabareesh

Sabareesh (Querist)
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28 November 2014 So, in the case Ive asked you earlier (place X & place Y) TDS is applicable since the aggregate is exceeding 1,80,000/-

Am i correct?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 November 2014 Yes you are correct. .......

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CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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28 November 2014 TDS required to deducted in Case, as decided by Bombay High Court in case JK Investors

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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28 November 2014 TDS required to deducted in Case, as decided by Bombay High Court in case JK Investors

Sabareesh

Sabareesh (Querist)
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29 November 2014 Kumar ji,
Can u be more detail?

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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29 November 2014 As per Ruling of Bombay High Court in case of JK Investor it was held that if Service Agreement can independently stand, then only TDS not required to deduct. However in fact Service Agreement was dependent upon Rent Agreement i.e. without rent agreement there could no service service agreement at all.

in your case annual rent, in including services, is likely to exceeds Rs. 1,80,000/- in present year therefore limit given under 194I will exceeds and tax required to deduct on whole amt of rent.

Say thanks you above advice is helpful for you

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Rupesh Jain

Rupesh Jain (Expert)
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29 November 2014 you can deduct the tds on rs. 10000/-u/s 194I limit Is rs. 180000/- so tds not required.

but for amenities if any assets provided like furniture, LCD, etc. then apply us/ 194C .

if above facility not given under amnities then you have to deduct the tds u/s 194I.
then 170000x12= 204000 then you have to deduct the tds. no option