TDS by Individuals

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Parthasarthy (Querist)
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10 November 2009 If individual professional has to be audited for gross receipts exceeding 10 lakhs in a year, what are consequences for non deduction of TDS on account of exclusively personal expenses w.r.t following sections:-

194 H for payment of commission to real estate broker on purchase of property for residence or on arranging rented property.

194 I for payment of rent of house in which he stays

194 I for payment of hotel bill over Rs.120,000 in a year to a hotel for casual stays at various dates.

For other entities liable to do TDS (Firms / Companies), as clarified by board, if their employee or professional to whom they reimburse the amounts are staying on casual basis, they do not have to deduct on reimbursement of amount. However it is also clarified in the same circular that if the individual / professional is audited u/s 44AB the individual or professional staying have to deduct TDS. In case the stay at a particular hotel for personal use exceeds 120,000 can the individual deposit the TDS Nett of Tax to the PAN Number of the Hotel.

If for business use an audited individual (proprietor) stays occassionally at 5star hotel charging Rs.10,000 / day for more than 12 times in a year, is that a regular basis or occassional and has TDS to be deducted?

Does TDS have to be applied if making payments for Hotel Room in Foreign Country for Business or Personal whether we make payment by credit card on internet or if we pay dollars directly at the hotel. Does it make a difference if Hotel Chain in foreign country also has hotels in India.

Aditya Maheshwari

Aditya Maheshwari (Expert)
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10 November 2009 If TDS is not deducted on expenses claimed as an expenses under the head business and profession then the same is disallowable u/s 40(a)(ia) not otherwise

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