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TDS on payments against EB,Water, Fuel to Lessor

TDS 736 views 3 replies

Balasubramanian V

Dy. Manager

45 Points Posted on 12 March 2010

Applicability of TDS on composite payments against utilisation of Water, Electricity & fuel reimbursements to the Lessor. We will be getting a debit note from the Lessor against our utilisation and the lessor will make the payment to the authorities as a whole, even for the premises which was occupied by other tenents. Will there it be a TDS for these reimbursements? If so under which section?. Thanks

Replies (3)

Rachit

Analyst

913 Points Posted on 12 March 2010

No TDS would be applicable on Re-imbursement of expenses on the basis of actual consumption. If the lease agreement stipulates a fixed amount for these expenses, then it would be construed as part of Rent and TDS would be applicable on it u/s. 194I

Balasubramanian V

Dy. Manager

45 Points Posted on 12 March 2010

I don't think, we can cosider this as a actual consumption as it is hard to identify the same. May be the proportionate amount debited to us. Also, we do not get any copy of invoice which is being paid to the authorities by the lessor. In this case will it be the TDS applicable? tks

Rachit

Analyst

913 Points Posted on 12 March 2010

As long as this re-imbursement amount is not fixed and the same is claimed by lessor separately by way of a debit note, No TDS would be applicable. The agreement should mention this fact that the lessee shall re-imburse E,W & F separately based on actual/ proportate basis as deternmined by the lessor