Tds on rental charges

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Gireesh Hegde (Querist)
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09 April 2012 Hi,

Can anybody confirms whether TDS to be deducted on the Full amount of Invoice of Rental Charges / Before Service Tax amount?(assume that rent amount more than 180000)

Thanks.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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09 April 2012 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.

Gireesh Hegde

Gireesh Hegde (Querist)
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09 April 2012 Thanks Mr.Sanjay.

CA PRAVEEN SINGH

CA PRAVEEN SINGH (Expert)
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09 April 2012 Agree with above...
TDS IS TO BE DEDUCTED ON RENT EXCLUDING SERVICE TAX.U/S194I,(CIRCULAR NO. 4/2008 )
OTHERS TDS IS TO BE DEDUCTED INCLUDING SERVICE TAX.U/S 194 C, 194 J.

Mihir Doshi

Mihir Doshi (Expert)
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09 April 2012 Section 194I and Section 194C are interpreted to take the exact meaning of the sections.

Section 194I starts with "Any Income" which denotes about only income part which is liable to TDS. Here Income is only Rent as Service tax are going to government coffers. While other Sections, suppose 194C speaks about "Any Sum" which denotes amount inclusive of other taxes.

Interpretation of sections give the real meaning of Income Tax Act.

Hope you are understood the concept why TDS on rent is on actual amount excluding Service Tax.

Thanks
Mihir Doshi

Gireesh Hegde

Gireesh Hegde (Querist)
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09 April 2012 Thanks Mr.Praveen & Mr.Mihir

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