TDS on hired printer

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suneel (Querist)
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04 July 2008 Hello,

We are hired 2 printners on rental basis. If, we combined both the printers, value is exceeding Rs.1.20 lacs P.A. Our service provider invoicing with 12.5% VAT.Pls let us know the TDS rate. If TDS is applicable, we need to deduct on gross amount(inclusive of VAT) or on only rental amount. Pls clarify.

Thanking you,
Suneel.

Late CA Sampat Jain

Late CA Sampat Jain (Expert)
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04 July 2008 section 194I provides TDS on rent.

AND THE TERM RENT IS DEFINED AS FOLLOWS:

i) “rent” means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of (either separately or together) any,—

(a) land; or

(b) building (including factory building); or

(c) land appurtenant to a building (including factory building); or

(d) machinery; or

(e) plant; or

(f) equipment; or

(g) furniture; or

(h) fittings,

whether or not any or all of the above are owned by the payee;]

THEREFORE RENT ON A EQUIPMENT IS LIABLE FOR TDS U/S 194I , I.E TDS ON RENT.

THE AMOUNT WILL BE INCLUSIVE OF VAT

THE RATE OF TDS IS AS FOLLOWS:
194-I. Any person, not being an individual or a Hindu undivided family, who is responsible for paying to [a resident] any income by way of rent49, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, [deduct income-tax thereon at the rate of—

a[(a) ten per cent for the use of any machinery or plant or equipment;

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