TDS deduction (RATES)

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Ankush Jain (Querist)
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20 June 2008 What will be the rate of deduction of TDS on rent for 1) shop taken on lease in a shopping mall, 2) signage usage charges, 3) equipment (like lift and air conditioners etc. )usage charges fixed in a shopping mall and used by the lessee?

CA Anand Sarda

CA Anand Sarda (Expert)
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20 June 2008 TDS is to be deducted with effect from 13th July, 2006 on following payments:

a) Payment of rent for machinery, plant, equipment, furniture or fittings under Section 194-I of the Act. The rate of TDS shall be 15% if the payee is an individual or HUF, otherwise the rate of TDS shall be 20% in case the total amount of rent paid exceeds Rs.1,20,000 during the Financial Year. It is hereby confirmed that payments made before 13th July, 2006 on account of rent of machinery, furniture shall itself be not liable for TDS However, for the sake of computing the threshold limit of Rs.1,20,000/- during the Financial Year, all payments made on account of rent even before 13th July, 2006, are to be taken into account. The amendment is to Section 194-I. Accordingly payment of rent of land or buildings is also to be included for computing the threshold limit of Rs.1,20,000/-.

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