TDS on Hotel Room Payments

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This query is : Resolved

Punit (Querist)

26 February 2008 Hi Experts,
I have stuck up on one very crucial issue. Please help me out...
Please let me know, if a company makes payments for hotel accomodation for its employees / directors / executives etc. which exceed Rs.120000 p.a. whether the payment would be treated as rent withing the purview of provisions of sec. 194I or not. If yes, then TDS should be done or not??
Circular No. 715, dated August 8, 1995 clarifies that if the stay is on regular basis then TDS has to be deducted u/s.194I, but there is no clarification as to what constitutes "Stay on Regular Basis". Please suggest what should be understood by Stay on Regular Basis.

Thanks in advance

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)

26 February 2008 You have to make it clear whether the company's action is falling within the ambit explanation to sectio 194I

"rent means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of building"

CA Saurabh Maheshwari

CA Saurabh Maheshwari (Expert)

27 February 2008 YES, TDS IS REQUIRED TO BE DEDUCTED.THE PAYMENT YOU ARE MAKING TO HOTEL IS FOR TENANCY CHARGE FOR THE PERIOD YOU STAYED THERE

Ca. Alok Gupta

Ca. Alok Gupta (Expert)

28 February 2008 if there is any agreement between company and hotel about rate then there is no liability for deduct TDS u/s 194-I. otherwise payment treated as rent u/s 194 I and liable to deduct TDS if exceed rs.120000/-

Punit

Punit (Querist)

04 March 2008 Hi Experts,
I have stuck up on one very crucial issue. Please help me out...
Please let me know, if a company makes payments for hotel accomodation for its employees / directors / executives etc. which exceed Rs.120000 p.a. whether the payment would be treated as rent withing the purview of provisions of sec. 194I or not. If yes, then TDS should be done or not??
Circular No. 715, dated August 8, 1995 clarifies that if the stay is on regular basis then TDS has to be deducted u/s.194I, but there is no clarification as to what constitutes "Stay on Regular Basis". Please suggest what should be understood by Stay on Regular Basis.

Thanks in advance