Tds on rent payable by company

This query is : Resolved

Ramesh (Querist)
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22 March 2017 Hi!
Landlord of our company's guest house has really confused me. Pl. help me in my understanding:
Since the company is going to pay rent of INR 51000 per month for full year (Apr-2017 to Mar-2018), provisions of Section 194I-B is not applicable. Hence provisions of 194I is applicable and TDS @ 10% on every payment of rent to be deducted.
Thanking you in anticipation.
Rgds,
Ramesh

CA Shubhanshu Jain

CA Shubhanshu Jain (Expert)
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22 March 2017 Yes, TDS is to be deducted @10% on every payment of rent you have also mentioned same, so what is confusion

Ramesh

Ramesh (Querist)
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23 March 2017 Thanks Subhanshu. Due to other work load I am not in that much touch with latest direct tax provisions.He argued that as per Budgets, TDS needs to be deducted @5%. He sent me extracts of one article showing
"Firms/Companies/AOP/BOI paying rent more than 50,000 per month but rent for full year is lesser
than Rs. 180000, say e.g. building was occupied in last quarter of the financial year, shall not be
required to pay TDS"
"TDS rate on rent u/s 194-IB has been pegged at 5% as against TDS @ 10% in case of 194-I.".
So I wanted clarity that since the amount of Rent is more than Rs. 1,80,000/- during the year, Seection 194-IB is not applicable.
Again thanking you for your quick response.

CA Shubhanshu Jain

CA Shubhanshu Jain (Expert)
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23 March 2017 Section 194-IB is applicable only in case on individual or HUF who are not required to get their accounts audited and paying rent of more than Rs. 50000 p.m to a resident. In that case TDS is to be deducted @5%. There is no limit of Rs. 180000 in 194-IB.

Note that deductee (i.e. person paying rent) should be individual or HUF in order to cover under 194-IB, and since you have mentioned that company is paying rent so 194-I is applicable rather than 194-IB

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Ramesh

Ramesh (Querist)
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24 March 2017 Thanks a lot Shubhanshu...

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