TDS
This query is : Resolved
14 March 2011
Our company has executed a joint venture agreement with a proprietorship firm for running our business activity.
Under this arrangement: the firm , who is the owner of the premises, only provides the premises & some fixtures.
All other activities are undertaken, executed, supervised etc. by us.
The firm receives a monthly payout of Rs.50,000/- per month towards the JV compensation .
Kindly advise the following at the earliest.
1) How to account for this payment (under which head in P&L )
2) Whether this payment will attract TDS ?
3) If yes, what will be the applicable rate ?
Our company has executed a joint venture agreement with a proprietorship firm for running our business activity.
Under this arrangement: the firm , who is the owner of the premises, only provides the premises & some fixtures.
All other activities are undertaken, executed, supervised etc. by us.
The firm receives a monthly payout of Rs.50,000/- per month towards the JV compensation .
Kindly advise the following at the earliest.
1) How to account for this payment (under which head in P&L )
2) Whether this payment will attract TDS ?
3) If yes, what will be the applicable rate ?
14 March 2011
In Effect it seems to be a Rent Agreement in nature and not a JV agreement.
Hence in my view,
1) Show the amount as rent in P/L
2) TDS to be deducted u/s 194I (TDS on rent)
3) Rate of TDS 10%
Hence in my view,
1) Show the amount as rent in P/L
2) TDS to be deducted u/s 194I (TDS on rent)
3) Rate of TDS 10%
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