07 July 2007
The above Notifications it is mentioned that 194I is applicable if hotel accomodation is taken on regular bais.Will payment to Hotel for one day be treated as Regular Basis ?
02 May 2009
This query regarding the payment made to hotels is clarified by CBDT in the circular 715 dated 8.8.1995 as following -
Question 20: Whether payments made to a hotel for rooms hired during the year would be of the nature of rent ?
Answer: Payments made by persons other than individuals and HUFs for hotel accommodation taken on regular basis will be in the nature of rent subject to TDS under section 194-I.
This leads to another problem of defining the regular basis. The CBDT circular 5/ 2005 dated 20/07/2002 has calrified the "hotel accomodation taken on reguler basis" as following -
Where earmarked rooms are (let out for a specified rate and specified period, they would be construed to be accommodation made available on “regular basis”, Similar would be the case, where a room or set of rooms are not earmarked, but the hotel has a legal obligation to provide such types of rooms during the currency of the agreement.
Thus TDS is only deductible where the rooms or set of rooms are embarked or if not so the hotel is under obligation to provide the rooms. Thus if no rooms are embarked and hotel is not under obligation to provide rooms, no TDS is required to be deucted even if the rooms are hired on daily basis.
CAclubindia
