TDS ON HOTEL PAYMENTS

This query is : Resolved

narender (Querist)
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19 February 2010 HI

I HAVE MADE A PAYMENT OF A SUM OF RS 9,50,000 TO TAJ SAFARI HOTEL TOWARDS BOOKING OF ROOMS

AT THAT TIME THE HOTEL SAID THAT THEY ARE NOT COVERED UNDER SECTION 194 I

AS THE NATURE OF BOOKING IS NOT CONTINOUS

BT NOW OUR AUDITORS ARE ASKING FOR TDS ON HIS PAYMENT

CAN ANY ONE PLS GUIDE ME IS TDS IS APPLICABLE OR NOT IN THIS CASE

THANKS IN ADVANCE

CA Chitresh Gupta

CA Chitresh Gupta (Expert)
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19 February 2010 Only payments made for Hotel accomodation taken on regular basis will be in the nature of rent subject to TDS under section-194J.

Refer Circular No. 5 / 2002 dated 30-07-2002

Regards

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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19 February 2010 if it is regular basis covered u/s.194I

narender

narender (Querist)
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20 February 2010 we have paid 9,00,000 in two time booking.

is it deemed to be on continus basis????

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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27 July 2025 Here’s a clear explanation for your query about **TDS on hotel payments for room bookings**:

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### Key points:

1. **Section 194I** covers TDS on **rent of immovable property**, including **rent for commercial property like hotel rooms**.

2. **TDS is applicable only when the rent payments are made on a regular or continuous basis.**

3. **If the booking is for a one-time or occasional event (like a single conference, wedding, or short stay), then TDS under Section 194I is generally NOT applicable.**

4. The **CBDT Circular No. 5/2002 dated 30-07-2002** clarifies that **occasional or non-regular payments for hotel accommodation do not attract TDS under Section 194I**.

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### Regarding your case:

* You made payment of Rs. 9,50,000 **in two installments for booking rooms**.
* Even if paid in two parts, if the bookings are **for specific events/dates and not for a continuous lease or rental**, it **does NOT qualify as “rent” under 194I for TDS purposes**.
* So, **TDS is generally not applicable on such payments**.

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### When will TDS be applicable?

* If you have a **rate contract or agreement with the hotel for regular bookings** (e.g., monthly rental or continuous stay arrangement), then TDS is applicable on such payments under Section 194I @ 10%.

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### So in short:

| Booking Type | TDS on payment? | Explanation |
| ------------------------------ | --------------- | ------------------------------------------- |
| One-time or occasional booking | No | Not continuous, no rent TDS as per circular |
| Regular/continuous bookings | Yes, @ 10% | Considered rent under Section 194I |

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### What should you do?

* If your bookings are occasional, inform auditors with reference to Circular No. 5/2002.
* If the auditor insists, you may seek a **specific professional opinion or a ruling**.

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