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TDS u/c 194 I Query

24 February 2011

I have been making payment to parties u/s 194-I ie TDS on rent after deduction of tds @ 10% on production of PAN copy. If PAN is not submitted i make deduction @ 20%.

Now my question is if i am making payment to Govt organisation, Deputy Collectorate office to be specific, will they be required to produce PAN copy as they said they have no PAN as govt deptt dnt require so.

Your answer may be that TDS wont apply if we make payment to Govt organisation and if they produce Exemtion certificate from CCIT u/c 10(20) or (20A). Lets say they dont have this certificate also.

Please study the above case and suggest that whether i should deduct TDS @ 10% or 20% or to deduct no TDS at all.

regds

CA.Rakesh Kumar

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7 Replies

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 26 February 2011

payment to deputy collector for rent?

please repost your query with correct details.

CA.Rakesh Kataria (CA ) (291 Points)
Replied 26 February 2011

Ours is a PSU and catering to the needs of small scale units and providing them subsidy in exhibitions. Deputy Collectorate office has organised the exhibition in their city and we sponsered our
units to participate in the exhibition by taking stalls. We have to pay Stall rent to deputy collectorate office on behalf of our SSI units.

Now the Deputy Collectorate office has raised an invoice for payment of Stall rent to us. I generally make payment to other exhibitors on production of PAN card and after deduction of TDS u/s 194I @ 10%.\

Hope the information will suffice now

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 26 February 2011

i assume its land revenue, not the rent ...........

on revenue no provision of TDS

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CA.Rakesh Kataria (CA ) (291 Points)
Replied 26 February 2011

Study the case properly yar.... I told you that i have been making payment after deduction u/s 194-I. Its a exhibition organised by the district collectorate office. Its a stall rent and deduction should be made u/s 194 I. Its not a land revenue.

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 26 February 2011

in case of absence of any such exemption you have to deduct @ 20%

CA.Rakesh Kataria (CA ) (291 Points)
Replied 26 February 2011

Sharmaji Education Cess is not applicable while deducting TDS u/s 194 I.

sachin sharma (article) (122 Points)
Replied 26 February 2011

hi rakesh sir,

There is no requirement to deduct income tax at source on income by way of rent if the payee is the Govt, but in the case of the local authorities and statutory authorities referred to in section 10(20A)/10(20), there is no requirement to deduct income tax at source if these authorities produce the tax exempt certificate, otherwise normal provision of income tax at source will be applicable on such authorities.

Circular no. 699, dated january 30, 1995.

Sir then you have to decicde the payee falls under which category.

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