TDS on Rent

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Piyush Agrawal (Querist)
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13 March 2009 In case of Payment of Lease rent to a local Authority (Annually Rs. 2,50,000/-)Does it create the liability for deduction of Tax (TDS) on Rent? Why?

CA.SHAHZAD SAYYED

CA.SHAHZAD SAYYED (Expert)
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13 March 2009 Local Authority is a Government Body so no need of TDS

chetan soni

chetan soni (Expert)
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13 March 2009 There is no requirement to Deduct TDS on income by way of rent if the payee is the govt. In case of local authority & statutory authorities referred to in sec 10(20), there will be no requirement to deduct tds if the person responsiable is satisfied about their exemption status as per sec. 10(20) on the basis of a certificate to this effect given by the said authorities.
Circular No. 699, Dated Jan 30, 1995.

Provision of Sec 10(20):
The income of a local authority which is chargeable under the head Income from house property, Capital gains or Income from other sources or from a trade or business carried on by it which accrues or arises from the supply of a commodity or service (not being water or electricity) within its own jurisdictional area or from the supply of water or electricity within or outside its own jurisdictional area].

Explanation.For the purposes of this clause, the expression local authority means
i) Panchayat as referred to in clause (d) of article 243 of the Constitution87; or
ii) Municipality as referred to in clause (e) of article 243P of the Constitution88; or
iii) Municipal Committee and District Board, legally entitled to, or entrusted by the Government with, the control or management of a Municipal or local fund; or
iv) Cantonment Board as defined in section 389 of the Cantonments Act, 1924 (2 of 1924);

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