Tds
This query is : Resolved
21 May 2014
If a company paying Rent for office premises on which landlord also charges maintenance & Electricity bill through separate invoice & the Landlord charges Electricity bill over and above the actual rate per unit then whether TDS is to be deducted on electricity Bill & Maintenance charges.
21 May 2014
you have to deduct the tds on maintenance charges if you pay rs 75000/- is year or 30000/- in single bill u/s 194C
Guest
Guest
(Expert)
22 May 2014
no u had nt to deduct tds on elect. charges
because its reimbursement of expenses nothing else.......
because its reimbursement of expenses nothing else.......
22 May 2014
Sir but the landlord charges Electricity Rate above the actual rate per unit.
Guest
Guest
(Expert)
22 May 2014
thats not important... u had taken the place for rent not for electricity.. i dont think that tds should be deducted from this
22 May 2014
r/sir
from where you know the rate of electricity is higher .?
in your rent agreement its already write that what rate of electricity bill you pay.
then no question of excess rate.
no tds will applicable.
from where you know the rate of electricity is higher .?
in your rent agreement its already write that what rate of electricity bill you pay.
then no question of excess rate.
no tds will applicable.
22 May 2014
Sir
First thing is that the Invoice raised by the Landlord shows the Rate @ Rs.15 but as per govt. rules it is lower than this.
Secondly the landlord issued separate invoice on which he charges Service Tax also.
That is why there is some confusion that whether TDS shall be deducted or not ?
And lastly we can not says that it is Reiumbursement of Expenses because Landlord charges Service Tax on above.
Please guide me ASAP.
First thing is that the Invoice raised by the Landlord shows the Rate @ Rs.15 but as per govt. rules it is lower than this.
Secondly the landlord issued separate invoice on which he charges Service Tax also.
That is why there is some confusion that whether TDS shall be deducted or not ?
And lastly we can not says that it is Reiumbursement of Expenses because Landlord charges Service Tax on above.
Please guide me ASAP.
27 July 2025
This is a tricky but common issue! Here’s the key points to consider:
---
### 1. **Rent vs. Reimbursement**
* If the **electricity charges are reimbursed at actual cost**, then it’s just a **reimbursement of expenses** — no TDS required.
* But if the landlord is charging **above the actual electricity cost**, effectively **making a profit or charging a service**, it’s more than mere reimbursement.
---
### 2. **Separate Invoice with Service Tax**
* Since the landlord is issuing a **separate invoice for electricity charges** and charging **Service Tax on it**, it indicates that the electricity billing is being treated as a **service supplied** by the landlord.
* This suggests it’s not a pure reimbursement but **a separate taxable supply**.
---
### 3. **TDS Applicability**
* For **rent** paid to landlord, TDS is under **Section 194-I** if threshold limits are exceeded.
* For **maintenance and electricity charges**, TDS applicability depends on nature of service:
* **Maintenance charges**: Usually under **Section 194C** (contractual services) if above threshold.
* **Electricity charges**: If billed at actual cost, usually **no TDS** (reimbursement).
But if landlord is charging more than actual cost + service tax, then it can be considered a **service income** and **TDS under Section 194J** (for professional/technical/other services) or 194C (contractual service), depending on service nature, may apply.
---
### 4. **Your situation:**
* Since landlord charges **electricity above actual rate** and adds **Service Tax**, it's effectively a **service provided**.
* So **TDS should be deducted on electricity charges**, likely under **Section 194J** (professional/technical service) or possibly 194C if treated as contract service.
* You cannot treat it as mere reimbursement if there’s a markup and service tax.
---
### Practical Suggestion:
* Seek clarity from landlord about actual cost and basis for electricity charges.
* Consult your tax advisor for correct **TDS section** and rates applicable.
* Meanwhile, **deduct TDS on electricity charges separately** to be safe, under 194J or 194C as advised.
* Maintain proper documentation to justify TDS deduction on these charges.
---
---
### 1. **Rent vs. Reimbursement**
* If the **electricity charges are reimbursed at actual cost**, then it’s just a **reimbursement of expenses** — no TDS required.
* But if the landlord is charging **above the actual electricity cost**, effectively **making a profit or charging a service**, it’s more than mere reimbursement.
---
### 2. **Separate Invoice with Service Tax**
* Since the landlord is issuing a **separate invoice for electricity charges** and charging **Service Tax on it**, it indicates that the electricity billing is being treated as a **service supplied** by the landlord.
* This suggests it’s not a pure reimbursement but **a separate taxable supply**.
---
### 3. **TDS Applicability**
* For **rent** paid to landlord, TDS is under **Section 194-I** if threshold limits are exceeded.
* For **maintenance and electricity charges**, TDS applicability depends on nature of service:
* **Maintenance charges**: Usually under **Section 194C** (contractual services) if above threshold.
* **Electricity charges**: If billed at actual cost, usually **no TDS** (reimbursement).
But if landlord is charging more than actual cost + service tax, then it can be considered a **service income** and **TDS under Section 194J** (for professional/technical/other services) or 194C (contractual service), depending on service nature, may apply.
---
### 4. **Your situation:**
* Since landlord charges **electricity above actual rate** and adds **Service Tax**, it's effectively a **service provided**.
* So **TDS should be deducted on electricity charges**, likely under **Section 194J** (professional/technical service) or possibly 194C if treated as contract service.
* You cannot treat it as mere reimbursement if there’s a markup and service tax.
---
### Practical Suggestion:
* Seek clarity from landlord about actual cost and basis for electricity charges.
* Consult your tax advisor for correct **TDS section** and rates applicable.
* Meanwhile, **deduct TDS on electricity charges separately** to be safe, under 194J or 194C as advised.
* Maintain proper documentation to justify TDS deduction on these charges.
---
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