TDS on Rent paid Directly to Landlord for resi. of Employee

This query is : Resolved

Jayesh Jagetiya (Querist)
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08 May 2009
Dear friends,
Our company has taken some Flats on Rent for our Employees.
We are deducting TDS on the Rent u/s 194I.

We also are including the Rent figure in the salary of the Employees & deducting Tax from the Salaries of the Employees u/s 192.

Is this the right treatment?

Are we not paying TDS 2 rimes on the same Rent Expenses?

Should we debit these expenses in Company Books in Rent Expense or Salary Exp?

chetan soni

chetan soni (Expert)
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09 May 2009 for landlord deducting TDS u/s 194I is right.
But for employees you should consider this as perks. & give the treatment as per sec 17.

You need to dr. this to salary a/c & not to rental expenses. THe main purpose of this is to provided the facility to employees. Rent is not paid for factory, godown etc. hence should not be dr. as rent to profit & loss a/c.

taxindiaconnect

taxindiaconnect (Expert)
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09 May 2009 Agreed with Chetan.

CA Avinash Haldia

CA Avinash Haldia (Expert)
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11 May 2009 You have correctly raised the issue of two time deduction of tax on the same expenditure. This needs to be taken up for clarification. Please note that any law which has been made needs to be as per Constitution of India. You must have heard that Courts have many times decided that a particular section or even a particular law does not have santion of the Constitution.

Please keep your brain open for such errors committed by the law makers. You will find a number of such situations which are not in confirmity with the Constitution.

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