TDS

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Nagendra

Nagendra (Querist)
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22 December 2009 Whether TDS has to be deducted from payment of hire charges for hire of Launch.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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22 December 2009 yes, we need to deduct the Tds under Sec.194I

Murtaza I Bhagat

Murtaza I Bhagat (Expert)
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22 December 2009 u/s 194I
Rent Payments:
Earlier, rent payments were deducted at 10% in case of Plant/Machinery/Equipments for all parties. In case of Land/Building/Furniture/Fittings, it was deducted at 15% for Individuals and 20% for others. Now the new amendment reduces the TDS rates and also makes it same for all types of Parties.
The newly amended 194-I section states that, the renting of Plant/Machinery/Equipments for all parties will entertain TDS at 2% and renting of Land/Building/Furniture/Fittings at 10% for all types of party.
The reduction of these rates is said to be due to, blockage of Working Capital funds in most of the cases because of higher TDS rates.
New rates for Rent:
1. Two Percent (2%) where payment for a rent is for Plant/Machinery/Equipments.
2. Ten Percent (10%) where payment for a rent is for Land/Building/Furniture/Fittings.