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TDS on non refundable extension fee

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(Querist)
07 April 2008 Hi members
Whether Tax has to be deducted on non refundable extension fee ?
As far as rent is concerned tax has to be deducted but does the same provision applies here ?

Extension fee here means the extension of contract period.
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S.Srinivasaraghavan

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S.Srinivasaraghavan (Expert)
08 April 2008 Yes TDS has to be on extension fee as well.

The nomenclature ‘rent’ as expounded in the Explanation to section 194-I itself amply reveals that the same is a generic term that includes within its ambit whatever payment made for occupation of a tenanted portion,it appears to be a composite concept not capable of being fragmented - Smt. Bishaka Sarkar v. Union of India [1996] 219 ITR 327 (Cal.).

Explanation to section 194-I shows that the word ‘rent’ therein has a wider meaning than ‘rent’ in common par­lance. It includes any agreement or agreement for use of land - United Airlines v. CIT [2006] 152 Taxman 516/287 ITR 281/202 CTR 184 (Delhi).
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