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Tds deduction on office rent

Hemant Kumar (Business Manager) (27 Points)

25 July 2016

I am a sole propreitor. I am paying following Office Rent in a Tech Park:

Office Rent: Rs. 16800

Service Tax: 2520

Electricity Bill: 4200 (fixed amount)

Total: Rs. 23,520 per month

I have following questions:

1. Do i need to deduct TDS (or is it optional?). If yes, how much

2. Where to deposit TDS and at what frequency

3. Can I reclaim TDS (As my annual gross profit is not taxable - less than 2lac per annum). If yes, how?

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4 Replies

CA Harshal Totla (Chartered Accountant) (2229 Points)
Replied 25 July 2016

are you a tax audit assessee?
Deduction is not required under Sec. 194I if the amount is paid or payable by an individual or Hindu Undivided Family. If individual/HUF not liable to tax audit in preceding year.
Secondly as per the breakup of rent provided by you, service tax amount is not included in the definition of rent.
If the rent received in previous year is less than Rs.1,80,000 then no tds is to be made.
Rate of tds under this section is 10%.
Tds is to be deposited On or before 7 days from end of month in which deduction is made where tax is paid accompanied by an Income-tax challan.
An assessee can claim refund of tds by filing return of income after adjusting tax liability if any.

Hemant Kumar (Business Manager) (27 Points)
Replied 25 July 2016

Thanks a lot Harsha.

Just to clarify,

1. I dont come under tax audit (last year annual income Rs 8lac only)

2. I am paying rent (not receiving). There was no rent paid in previous year. Its a new office

I wish to understand, if I can claim any tax benefit (like deducting TDS, submitting it now and then claiming refund at the year end). If yes, what should I do for that

CA Saurabh Singh (Practising Chartered ) (974 Points)
Replied 25 July 2016

Hello Hemand,

You are not covered under tax audit, hence you are not required to deduct TDS.

Also, if in future you deduct TDS, you shall be liable to file TDS retirn timely. The benefit of TDS deducted shall be taekn by the person on whose payment you have deducted TDS and not you. as thats not your income but the party whom you are paying income.