Tds on rent for office space incl of service tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 July 2013 Our newly formed private limited company has taken a office space from an individual for a rent of Rs.65000/-per month. from 1st April 2013. We have paid the rent for month of April & May 2013 without deducting TDS on rent.

We added another floor and revised the rent to Rs.115000/- + service Tax total= Rs.129214/-per month.

Now the owner has raised a rental invoice for Rs.129214/- incl service tax @ 12.36. for the month of June which has also been paid without deducting the TDS on rent.

Query 1- TDS @ 10% is to be deducted on the total rent paid till date i.e Rs.259214/- or on Rs.245000/- excluding Service Tax for June.

Query 2 - Can we remit the TDS together now, if so how to calculate the same. If any interest also to be paid for the delay. Also in future when should I deduct the TDS on rent and remit the same.

Pls help me to calculate.

Thanks

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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24 July 2013 1) TDS to be deducted on Rs 245000/- i.e., excluding Service Tax Amount u/s 194I.

As per Circular No.4/2008 dated 28.4.2008, it was clarified that TDS on rental payments would be required to be made only on the basic rental amount without including service tax. In other words, TDS should not be made on the service tax portion of the rent. However, this analogy is not applicable to TDS under other sections.

In short--
For 194I - Deduct TDS on amount excluding service tax.
For other section - Deduct TDS on amount including service tax.

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CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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24 July 2013 2) Yes you can deduct and deposit TDS now. You will have to pay interest on late deduction of TDS @1% per month of the TDS amount.

In future deduct the TDS on the date of payment or credit whichever is earlier.

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