Tds on rent
This query is : Resolved
13 November 2014
We have to pay Rs. 1,00,000 toward rent for october but we have not paid rent till now. i want to ask that when we have to deposit the tds on rent, whether it is 7th november or the following month in which we made the payment for rent?
13 November 2014
TDS has to be deducted at the time of payment or at the time of credit in the books of account, whichever is earlier. So, if you are paying directly without crediting the account then desuct tds at the time of payment, otherwise at the time of credit.
13 November 2014
Dear Vikram, the basic rule of tds is that tds deducted " on a date payment or credit" whichever is earlier so in instant case tds will be deducted at the time of booking of entry of rent
hence you have to pay tds 7th november but now date i.e. 7th nov has gone so you have to pay with interest i.e. 1.5% per month
hence you have to pay tds 7th november but now date i.e. 7th nov has gone so you have to pay with interest i.e. 1.5% per month
13 November 2014
Mr Ashwani i have a question that what is the date on which rent for october will be booked.
13 November 2014
Agreed with you Mr. Upadhyay, but it is to be checked whether he has made the entry for rent due, then only your view is correct.
13 November 2014
We have made no entry till now for rent due because the office is the property of the director and give on rent to the company from 1st october.
13 November 2014
We have made no entry till now for rent due because the office is the property of the director and give on rent to the company from 1st october.
27 July 2025
Thanks for sharing the detailed discussion! Here’s a concise summary and guidance for your situation on **TDS on rent when payment is delayed and not yet booked**:
---
### Key Point:
**TDS is deductible at the earlier of:**
* The date on which rent is credited in books (i.e., booked as expense), **or**
* The date of actual payment.
---
### Your case:
* Rent for October = Rs. 1,00,000
* Rent is neither paid nor recorded (credited) yet.
* The property is owned by the director and leased to the company from 1st October.
---
### What should you do?
1. **If you have not booked (credited) rent expense in books till now:**
* No TDS deduction obligation has arisen yet because credit has not happened.
* But practically, rent for October should be accrued/booked in October itself as an expense even if not paid (accrual accounting).
2. **TDS Deduction Date:**
* Once you book the rent (say you make the entry now), the TDS deduction obligation arises on that date.
* You must deduct TDS before making payment or along with payment, whichever is earlier.
3. **Since the due date (7th Nov) for depositing TDS on October rent has passed:**
* You are liable to pay **interest (1.5% per month)** on delayed TDS deposit.
4. **Best practice:**
* Immediately book the rent expense for October.
* Deduct TDS on the rent amount.
* Deposit TDS with interest for the delay.
* File TDS returns accordingly.
---
### Why book rent before payment?
Under **accrual accounting** (and Income Tax rules), expenses like rent are normally booked when they accrue, not just when paid. This creates the TDS deduction liability on that date.
---
### Summary for your case:
* Book rent expense for October ASAP (even if payment is pending).
* Deduct TDS on Rs. 1,00,000 on booking date (if payment is not earlier).
* Deposit TDS + interest for delay.
* Pay actual rent amount later.
---
If you want, I can help draft the accounting entries and TDS deposit process. Would you like that?
---
### Key Point:
**TDS is deductible at the earlier of:**
* The date on which rent is credited in books (i.e., booked as expense), **or**
* The date of actual payment.
---
### Your case:
* Rent for October = Rs. 1,00,000
* Rent is neither paid nor recorded (credited) yet.
* The property is owned by the director and leased to the company from 1st October.
---
### What should you do?
1. **If you have not booked (credited) rent expense in books till now:**
* No TDS deduction obligation has arisen yet because credit has not happened.
* But practically, rent for October should be accrued/booked in October itself as an expense even if not paid (accrual accounting).
2. **TDS Deduction Date:**
* Once you book the rent (say you make the entry now), the TDS deduction obligation arises on that date.
* You must deduct TDS before making payment or along with payment, whichever is earlier.
3. **Since the due date (7th Nov) for depositing TDS on October rent has passed:**
* You are liable to pay **interest (1.5% per month)** on delayed TDS deposit.
4. **Best practice:**
* Immediately book the rent expense for October.
* Deduct TDS on the rent amount.
* Deposit TDS with interest for the delay.
* File TDS returns accordingly.
---
### Why book rent before payment?
Under **accrual accounting** (and Income Tax rules), expenses like rent are normally booked when they accrue, not just when paid. This creates the TDS deduction liability on that date.
---
### Summary for your case:
* Book rent expense for October ASAP (even if payment is pending).
* Deduct TDS on Rs. 1,00,000 on booking date (if payment is not earlier).
* Deposit TDS + interest for delay.
* Pay actual rent amount later.
---
If you want, I can help draft the accounting entries and TDS deposit process. Would you like that?
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