Self lease

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 June 2013 An employee of the organization opts for Self Lease. Rent for the month is 26,000. Organisation is paying rent to the employee in the name of his wife. Pls clarify
(i)whether organisation is obliged to deduct TDS or not...?
(ii) If the organisation is paying directly to the Employee, Whether TDS is to be deducted or not...?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

19 June 2013 Case.1. Yes. tds apply under section 194I

Case.2 Need to add as perquisite in employee`s salary and tax applicable as per perquisite valuation rules

Guest

Guest (Expert)

20 June 2013 Please remove my doubt Expert, is that income of employee is not taxed under house property.

Actually, i am confused in this. Thanks

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

20 June 2013 No. here as per query lease has been taken in the name of employee`s wife and cheque also given to employee`s wife name, so it is income from HP for employee`s wife not employee`s income

Message likes : 1 times

Guest

Guest (Expert)

20 June 2013 Thanks sir for early and accurate reply.

Querist : Anonymous

Querist : Anonymous (Querist)

20 June 2013 Thank you for your reply sir. As per the Organisation policy in the case of Self lease 70% of the Actual rent will be treated as Income from house property of the employee. In that case if the rent is paid to the Employee Wife, what are the tax compliances...?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

20 June 2013 As i mentioned my earlier reply. rent paid to employee wife is the income for employee wife. so as like other landlord need to deduct tds u/s.194I

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