Tds on hotel accommodation bill and other services

This query is : Resolved

Jatin Kumar (Querist)
Follow

21 January 2017 Respected Members,

I am having a query relating to TDS on payment of Hotel Accommodation and other services like transportation, spa etc. provided by the hotel to the directors of a company for the purpose of business and payment made by the company to the hotel for this.

I have read Department circular for hotel accommodation, where it has been mentioned that TDS u/s 194I will be applicable only when there is a rate contract taken on regular basis but in our case it is a Rate Contact only, because of this point we are out from section 194I (However more clarification required-any case law of supreme court or High Court came after this circular)

Now, apart from accommodation, directors have taken other services as mentioned in invoice such as Room service snacks, Food Expenses, Bar Services, Guest Laundry, Massage, Confeteria, TAB Transportation of guest, Pool Bar.

My question is somehow clear in respect of accommodation but what about other charges those mentioned in Invoice apart from accommodation.

Thanks in Advance.

Jatin Kumar

Jatin Kumar (Querist)
Follow

23 January 2017 Dear Members,
Please response in this matter.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
Follow

27 July 2025 Great question! Here’s how **TDS applies on hotel bills** and related services:

---

### 1. **TDS on Hotel Accommodation Charges (Section 194I)**

* As per the CBDT circular, **TDS under Section 194I (Rent)** is applicable on rent for hotel accommodation **only if there is a rate contract or regular arrangement** with the hotel.
* If your company has a **rate contract with the hotel on a regular basis**, then TDS @ 10% under **Section 194I** applies on the accommodation charges.
* If there is **no regular contract** or it’s a **one-time transaction**, then TDS under Section 194I may **not** apply as per the circular.

---

### 2. **TDS on Other Hotel Services (Food, Transportation, Spa, Laundry, etc.)**

* These services (room service snacks, food, bar, laundry, transportation, spa, cafeteria, pool bar, etc.) are **not rent** but **service charges** or **supply of goods and services**.
* TDS on these is **not covered under Section 194I** (which is for rent).
* Typically, these charges would be subject to **TDS under Section 194C (Contractual payments)** or **Section 194J (Professional fees)** only if such services are provided by the hotel as part of a contract.
* However, since these are normal hotel services **billed along with accommodation**, generally **no TDS is deducted separately on these service charges**.
* The entire invoice amount is usually considered under **Section 194I only if the rent criteria are met** (rate contract, etc.).

---

### Summary:

| Charges | TDS Section | Applicability |
| --------------------------------------------------------- | ------------ | ---------------- |
| Hotel Accommodation (with rate contract) | 194I | Yes, @10% |
| Hotel Accommodation (without rate contract) | 194I | Usually no TDS |
| Other Services (food, laundry, transport, spa, bar, etc.) | None usually | No TDS deduction |

---

### Any case law / clarification?

* The CBDT circular clarifies that **Section 194I applies only if there is a rate contract or regular payment for accommodation**.
* Other services are incidental and generally do not attract TDS.
* No Supreme Court or High Court ruling specifically changes this position post the circular.

---

**So in your case:**

* Deduct TDS @ 10% under **194I only on accommodation charges if you have a rate contract.**
* For the other services, generally **no TDS is deducted** separately.

---

Would you like help drafting a note for your accounts or communicating this internally?

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now