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TDS : Urgent

BINAYAK (Management Consultant) (104 Points)

23 December 2010

I have a problem

i am paying rent for a party. the party has certificate for lower deduction and hence i am deducting TDS as prescribed and depositing the same. Now the party has mortgaged the property for which i am paying the rent. the party has asked me to pay his cheque in favour of the third party whom the property is mortgaged.

Now I have to make my monthly payment to the third party. so while deducting tds whom should i consider original party or the third party???? cheque will be issued in favour of the third party so i am confused?? also on whose name tds certificates will be issued at the end of the month????

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3 Replies

CA ASHISH GUPTA (FCA, LL.B., MBA) (390 Points)
Replied 23 December 2010

TDS is to be deducted in the name of first party and TDS Cert. in the name of first party means original owner.

Tarun (CA Practice ) (166 Points)
Replied 23 December 2010

Hi Binayak,

The certificate for deduction of TDS at a lower rate is in the name of the person, to whom you were paying rent earlier. However, he has now mortgaged te property to someone else and since you are paying rent by issuing instrument in favour of third party than you don't need to pay any heed to the certificate u/s 197.

You have to deduct TDS at the rates in force and also the TDS certificate will also be issued in the name of Third party only.

Regards,

Tarun

BINAYAK (Management Consultant) (104 Points)
Replied 23 December 2010

i am confused now???

i was not 100% sure, but i have studied somewhere that tds will be deducted in favour of the original party only and we can also avail lower deduction as granted similarly tds certificate will be issued in name of the original party

so can anyone please clearify????