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Tds rent

16 January 2013

Hello People,

I recently came across a confusing situation regarding TDS to be deducted while doing Statutory Audit of a firm.

The firm has deducted TDS on Rent @ 2% on hiring of a Mandap. I Would like to know whether the treatment is correct or the TDS is to be deducted @ 10%.

Also, if anyone could help me with the definition of 'Rent', it would be great.

Thank you.

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5 Replies

sanjay singhal (CA) (987 Points)
Replied 16 January 2013

Dear Samarth

"Explanation (i) to section 194 I

Rent means any payment, by whatever name called, under any lease, sub lease, tenancy, or any any other agreement or arrangement for the use of (either separately or together) any

a) land or b) building (including factory building) or c) land appurtenant to a building or d) machinery e) plant or f) equipement or g) furniture or h) fittings,

Whether or not any or all of the above are owned by the payee."

TDS rate 10% in case of land building furniture or fittings for all person.

TDs rate 2% in case of Machienery or plant or equipements.

in your case TDS rate should be 10%. There is no p&M & equipment involved in mandpa hiring. instead mandap includes hiring of space/ furniture/ fittings in common paralanance. Please check the service hired.

thanks

Sanjay

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