Tds on running charges of generator paid by bank

This query is : Resolved

Raj Kumar (Querist)
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10 April 2014 Dear All,

I am doing statutory branch audit for the year 2013-14. During the course of audit, it has been found that the bank has hired a generator for power supply. As per Rent Agreement entered into by the bank, the bank has undertaken to pay generator rent@Rs.7,000 per month on fixed basis plus actual running charges towards cost of diesel based on number of hours the generator is used. The generator supplier raises a separate bill towards actual cost of diesel consumed based of number of hours generator is used during the month which comes about Rs.12,000 per month.
Now I wish to know whether TDS u/s 194I is required to be deducted on the total amount (i.e. Rent+Fuel Charges) or no TDS is required to be deducted keeping in view only rent@Rs.7,000 pm which is below the threshold limit of Rs.1,80,000 per annum.
I have also come to know that there is one CBDT Circular regarding non-deduction of TDS on running/fuel charges of generator hired. If it is so, kindly quote the details of that CBDT Circular.
Thanks