Tds on rent received

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Sreeram Mangattu (Querist)
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05 May 2012 Company ‘X’ has to receive yearly (April 2011-March2012) rent of Rs. 1,80,000/- from a Firm Named ‘Y’ who is one of the sub contractor of company ‘X’. After discussion with firm ‘Y’, the rent amount of Rs. 1,80,000/- is shown as advance in the books of ‘X’
31.03.2012 Y a/c Dr 1,80,000/-
To Rent Received 1,80,000/-

On 31.03.2012, Firm ‘Y’ raised their bill of Rs. 4,00,000.00 for the sub contracting work, For this Company ‘X’ has deducted tds @ of 2% and paid balance Rs.2,12,000/-[4,00,000-(8000+180000)]
My question is whether company ‘X’ is liable to deduct tds for Rs.1,80,000/- (which is accounted as Rent Received).

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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05 May 2012 TDS would be deduct by the payer. In your case Company Y is the payer of rent so company Y is liable for deduct TDS. However as per section 194I No TDS liability arises If the rent paid doesn't exceeds Rs.1,80,000 p.a. So in your case rent paid by the company Y is Rs.1,80,000 p.a so TDS deduction liability doesn't arises for Company Y also. However you (company X) deducted sufficient amount of TDS on payment of contract fee. So no mistake by you.

OM SAI SRI SAI JAI JAI SAI

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Sreeram Mangattu

Sreeram Mangattu (Querist)
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05 May 2012 in the above query, i have one more doubt:

if Company X paid Rs. 392000/- on 02.04.2012. then the ledger balance of Y in Books of X shows a Debit balance of Rs. 180000/- on 30.04.2012 (there is no transaction in the month of April 2012.
Whether that debit balance will be treated as advance assessing officer of tds

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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05 May 2012 Mr. Sreeram Mangattu please give more clarification for your question it is not clear to under stand your doubt.

OM SAI SRI SAI JAI JAI SAI

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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05 May 2012 I think you mean Company X paid total amount of contract fee after deduction of TDS on 3,92,000 which is payable on 31-3-2012 as contract fee paid on 2-4-2012. And the Rent receivable from company Y as on 31-3-2012 till not received or adjusted againest of payments by the company X to Y(upto 30-4-2012) since the balance of Y shows debits as on 30-4-2012. and your question is any problem during the assessment of TDS? is it is your doubt then answer is as follows.

For assessing of TDS Deduction of the TDS at the time of payment or credit which ever is earlier, payment of TDS to the department with in due date prescribed with prescribed rate of TDS to the related section. Is important and these will consider but actual payment is not relavent.

If you doubt clarified then okay. otherwise clarify your doubt. And write if any doubt in these regards.

OM SAI SRI SAI JAI JAI SAI

Sreeram Mangattu

Sreeram Mangattu (Querist)
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05 May 2012 yes this is the situation....whether X should pay TDS of Rs3600/-(1,80,000 * 2%)on 07.05.2012 in sec 194 C

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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05 May 2012 No the TDS related to such amount is also paid with in 30-4-2012 if the deduction is made on 31-3-2012.

OM SAI SRI SAI JAI JAI SAI

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