Tds on room tariff of hotel paid?
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
12 September 2011
Plz guide me whether tds should be duducted on room tariff of hotel paid?
if yes under 194I or 194C
if yes under 194I or 194C
12 September 2011
Ü Where the assessee-hotel received payments from corporate customers under an agreement for use of the rooms in the hotel by such customers on regular basis, such payments would squarely fall within the term ‘rent’ as defined under the Explanation to section 194-I, and would hence attract deduction of tax at source. If such deduction results in any hardship or financial burden to the assessee, the proper remedy is to apply to the Assessing Officer under section 197 for the issue of certificate for deduction at lower rate or nil rate - Krishna Oberoi v. Union of India [2002] 257 ITR 105/123 Taxman 709 (AP.).
Ü The CBDT have clarified that, while section 194-I would be attracted to payments received for providing hotel accommodation on a regular basis under lease/licence agreements, the said provision would not apply to cases where only ‘rate contract’ agreements are entered into, under which only room tariffs are fixed, because, where an agreement is merely in the nature of a rate contract, it cannot be said to be accommodation ‘taken on regular basis’ - Circular No. 5/2002, dated 30-7-2002.
Ü The CBDT have clarified that, while section 194-I would be attracted to payments received for providing hotel accommodation on a regular basis under lease/licence agreements, the said provision would not apply to cases where only ‘rate contract’ agreements are entered into, under which only room tariffs are fixed, because, where an agreement is merely in the nature of a rate contract, it cannot be said to be accommodation ‘taken on regular basis’ - Circular No. 5/2002, dated 30-7-2002.
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Querist : Anonymous
Querist :
Anonymous
(Querist)
12 September 2011
Thanx a lot Sanjay.
But Pls tell me if there is no any agreement & company pays room tariff of hotel then whether tds is deductible & under what section?
But Pls tell me if there is no any agreement & company pays room tariff of hotel then whether tds is deductible & under what section?
12 September 2011
If there is no agreement and it is not a regular payment TDS deduction is not required. But if the same is paid on a regular basis without any agreement TDS u/s 194C shall be deducted.
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