TDS on Rent u/s 194I of I.T.Act

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This query is : Resolved

CA Sanjay Baheti (Querist)

24 May 2010 A property is jointly owned by 10 people. The rent per person,does not exceed the TDS limits. However, the rent amount is paid to a single co-owner who is entitled to receive it on behalf of the other owners . Is TDS required to be deucted from the payee- the total amount of rent exceeds the taxable limit.

CA Vijay Kumar Gupta

CA Vijay Kumar Gupta (Expert)

24 May 2010 get poa from the other coowner for collecting the rent and submit it to the tenant, then the tenant can be requested not to deduct tax at source.

Vikram Kothari

Vikram Kothari (Expert)

24 May 2010 As per me we have to deduct TDS here.

CA Vijay Kumar Gupta

CA Vijay Kumar Gupta (Expert)

25 May 2010 Difference of opinion
pl.refer circular no.718 dt.22-08-1995 and page no.a-311-312 last lines on a-311 of Direct taxes Ready Reckoner 2009-10,2010-11 by Dr. Vinod K. Singhania
I hope it will remove your doubts.

Aditya Maheshwari

Aditya Maheshwari (Expert)

29 May 2010 - If there are a number of payees, each having definite and ascertainable share in the property, the limit of Rs. 1,20,000 will apply to each of the payee/co-owner separately. The payers and the payees are however advised not to enter into sham agreements to avoid TDS provisions.

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