Lalit (accounts) (195 Points)
08 June 2009We are paying warehouse rent through an intermediary, say bank. Bank is paying rent on our beahlf and deduct TDS on rent and gives us a certificate that it has deducted TDS on rent and provision of sec 194I is fulfilled and charge us full amount of rent through ECS.
My question is whether our responsiblity is satisfied with the certificate received from bank or we have to deduct TDS on payment made to bank?
Mannurkar
(Accountant)
(159 Points)
Replied 08 June 2009
Dear Lalit
Confirm from the bank whether bank has remmitted TDS amount to the credit of Central Government account on your TAN ? After all you are responsible to deduct the TDS and remit to the credit of Central Government and issue the certificate to payee in Form 16A
Amol Gopal Kabra (CA,CS,DISA)
(Practicing CA)
(8539 Points)
Replied 08 June 2009
In case you have given standing instructions to bank to pay the rent as well as TDS, you need not to pay the TDS again.. The certificate from bank is enough for satisfaction of your liability.
RAMANJU
(here to updating the knowledge)
(485 Points)
Replied 08 June 2009
Lalit
(accounts)
(195 Points)
Replied 08 June 2009
Thanx to all
Actually we are having a commodity depository account with bank. In commodity depository, commodity is lying in warehouses which raises bill in our name and receive payment from bank giving bill to bank. Say a Warehouse raises a bill of Rs. 1 Lachs in our name and gives it to bank. Bank in turn deducts TDS of Rs. 20600/- and makes payment of Rs. 79300/-.
Further bank debits my account with Rs. 1,00,000/- and gives me certificate that provision of Sec 194I is complied along with bill raised by warehouse.
Warehouse is receiving TDS certificates from Bank not from us.
In this case what is my liability? Should I deduct tax on Rs. 1,00,000/- paid to bank?
AMEET KIMBAHUNE
(Consultant)
(87 Points)
Replied 08 June 2009
| Originally posted by :Mannurkar | ||
| " | Dear Lalit Confirm from the bank whether bank has remmitted TDS amount to the credit of Central Government account on your TAN ? After all you are responsible to deduct the TDS and remit to the credit of Central Government and issue the certificate to payee in Form 16A |
" |
I affirm with that view. But the problem lies if the Bank has deposited TDS under its TAN and that too under 194C. Then you again have to deduct TDS & issue a certificate to the Bank.
Lalit
(accounts)
(195 Points)
Replied 08 June 2009
Dear Ameet
| " | I affirm with that view. But the problem lies if the Bank has deposited TDS under its TAN and that too under 194C. Then you again have to deduct TDS & issue a certificate to the Bank. | " |
Bank is giving us certificate that provision of Sec194I is complied by the bank. It means bank is dedcuting TDS U/s 194I and depositing it.
CA. Dashrath Maheshwari
(TaXpert)
(15090 Points)
Replied 08 June 2009
| Originally posted by :Lalit |
My views are different,
The liability to deduct TDS is on the assessee, who are liable to pay the warehouse rent and who are claiming the deduction of these expenditure.
The liable person can have an arrangement with other person (Here and after, the Bank) to pay the warehouse rent, BUT, the payment should be net of TDS. The bank should debit only the amount paid by them on behalf of their customer (here- assessee), it means they can not deduct TDS, as they are not paying RENT, they are just transferring amount as per instructions of the customer.
Customer(Assessee) should credit the bank, with amount transferred by them and debiot the same amount to the party to whom, warehouse rent is being paid, Also make a journal entry to effect the TDS on Rent. Pay Online, the TDS on that rent.
It is simple, but please clarify that why you have made such complications.
Lalit
(accounts)
(195 Points)
Replied 30 June 2009
| Originally posted by :Mr. Dashrath Maheshwari | ||
| " | My views are different, The liability to deduct TDS is on the assessee, who are liable to pay the warehouse rent and who are claiming the deduction of these expenditure. The liable person can have an arrangement with other person (Here and after, the Bank) to pay the warehouse rent, BUT, the payment should be net of TDS. The bank should debit only the amount paid by them on behalf of their customer (here- assessee), it means they can not deduct TDS, as they are not paying RENT, they are just transferring amount as per instructions of the customer. Customer(Assessee) should credit the bank, with amount transferred by them and debiot the same amount to the party to whom, warehouse rent is being paid, Also make a journal entry to effect the TDS on Rent. Pay Online, the TDS on that rent. It is simple, but please clarify that why you have made such complications. |
" |
Actually we have a commodity demat account with bank. In demat mode of commodity, commodity is lying with a warehouse and warehouse receives rent from bank and gives bill to bank in our name. Bank in turn, in demat bill, charge warehouse rent saperately as well as demat charges and enclose bill received from ware house with demat bill. And charge whole amount of demat bill directly from our bank account.
When we asked the bank to charge amount net to TDS from our bank account instead of whole amount, bank said that it has already deducted TDS on payment made to warehouse and deposited the same so you need not to deduct TDS again on same expenses. Additionaly bank gave us certificate that it has paid TDS on warehouse rent and provision U/s. 194I is complied with.
My question is that by doing it whether my liability u/s. 194I is complied with or should i dedcut TDS again on rent?
CAclubindia
