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Tds rent co owners of building

Jyothis (Article) (1127 Points)

04 September 2015

Rent Agreement for office between X Ltd (Licensee) & A,B,C cowoners of office building (Licensor) agrees give the building for a rent per month Rs.32,776.Rent is paid by Xltd equally to A,B,C .ie. Rs.10,92 per co-owner of building.Is tds u/s 194IB applicable on agregate Rent.as it exceeds Rs.180,000 per annum.However if we consider each individual parties 10,925*12=Rs.1,31,100,amount has not exceed the limit of Rs.1,80,000.

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6 Replies

Miss Rinkal (Student) (1304 Points)
Replied 04 September 2015

If cheques have been issued separately to A, B and C separately i.e 3 separate agreements are made then TDS provisions are not applicable. But if cheque has been issued in a single name then TDS provisions are applicable

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Jyothis (Article) (1127 Points)
Replied 04 September 2015

Payments are made to 3 parties on sepearate cheques,But payment is effected on the basis of a single agreement with 3 co-owners together.

Miss Rinkal (Student) (1304 Points)
Replied 04 September 2015

If in the agreement it mentions that share of each co-owner is definite and ascertainable then the limit will be applicable to each co-owner separately.

I.e to say that the rent agreement must have mentioned share of each co owner and not just an aggregate amount.

If the payment conditions in the agreement would state somewhat like this that x amount is to be given to each party

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Jyothis (Article) (1127 Points)
Replied 04 September 2015

Please see the quotings of Agreement.

"The rent of said premises shall be at the rate of Rs.13.11/Per square feet with an enhancement cost renewal for rent amount of Rs.32,776 per month,equally distributed to all the owner per month payable at 10th of every month".

Jyothis (Article) (1127 Points)
Replied 04 September 2015

if we consider, Rs.10,925 which 1/3 of total Rent Rs.32,775.Rs.10,925*12=Rs.1,31,100 no tds applicable individually if we consider individual's share of rent income.

Will rent payable in a single agreement attract TDS or not.

Please comment.