Rent perquisite

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Anwar Shaikh (Querist)
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23 January 2012 Dear experts,

One of our Director is getting House Rent allowance Rs.11500/- per month. But he is not paying any rent to any one.

Further company has taken one flat one Rent basis for which company is paying Monthly rent Rs.61000/- (Gross.

Now company is deducting monthly TDS @ 10% on rent amount, Rs.6100/- and crediting every month to Govt.

This rented house is being used by the director.

My question is :-

1) Shall company add to the salary of Director Rs.61,000 as rent (perquisite)

2) If yes, Shall we need to deduct TDS on salaries after adding such Rent, or excluding Such rent.

3) If yes, Is it not that company is paying TDS two times, (1) First at the time of making payment to Lanlord (2) Second at the time of making payment to Employee

4) If company fails to deduct and pay the TDS on Rent perquisite, Can AO disallow the salary expenditure

5) If yes, How ?. Because company has already deducted the TDS on Rent (194I) and also paid TDS on salaries (192B)

Please reply, as early as possible.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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23 January 2012 1. Yes, Company has to add the rent perquisite to the director salary

2.Yes. need to be taxed as salary perquisite as taxable as adding the rent

3.This case company (employer has to comply with the 2 provision of the same act) as rent payer and one payment involves 2 persons income, one as non monetary benefit of director and monetary income for rent payee.

4. If the TDS not deducted for salary under section 192, there will not be dis allowance of expenses criteria(only for salary TDS), but Rent expenses will be disallowed. but salary perquisite will be allowed

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