Tds no rent

This query is : Resolved

Yogesh (Querist)
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27 July 2013 Our Company taken a building on rent party charge Rs. 100000 + 12.36% ST and bill raise to our company of Rs.112360/-
My query is that our company TDS will be deduct on 112360/- or basis bill value Rs. 100000/-. please tell me with rule section.

CA Ravi Kumar Murugesh

CA Ravi Kumar Murugesh (Expert)
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27 July 2013 CBDT vide circular no:4/2008 clarified that while deducting TDS on rental payments, there is no need to consider service tax. It means., tds is to be deducted only on rent because service tax paid by the tenant doesnt partake the nature of the income of the landlord.

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CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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27 July 2013 TDS to be deducted on amount excluding service tax i.e., on Rs 100000/-

As per Circular No.4/2008 dated 28.4.2008, it was clarified that TDS on rental payments would be required to be made only on the basic rental amount without including service tax. In other words, TDS should not be made on the service tax portion of the rent. However, this analogy is not applicable to TDS under other sections.

In short--
For 194I - Deduct TDS on amount excluding service tax.
For other section - Deduct TDS on amount including service tax.

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