Tds rate on office building maintenance charge
This query is : Resolved
08 February 2016
Dear Sir,
Is TDS applicable on the office building maintenance monthly charge that we pay to the building owners' association? If yes, then what would be the rate of TDS that needs to be deducted from the monthly maintenance charges? And under what 'nature of payment' would this come?
Is TDS applicable on the office building maintenance monthly charge that we pay to the building owners' association? If yes, then what would be the rate of TDS that needs to be deducted from the monthly maintenance charges? And under what 'nature of payment' would this come?
08 February 2016
Tds applicable u/s 194C it should be 2% on maintenance.
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09 February 2016
In my opinion NO TDS applicable
Reference : Mitsutor Shipping Agency Pvt Ltd Vs DCIT (ITAT Mumbai)
Where it is held as below,
The payment of maintenance charges by the owner of the premises to the society can by no stretch of imagination be said to be a payment to contractor for carrying out work on behalf of the owner of the premises. These payments were made to defray common cause. There is no contract for maintenance between the society and the owner of the premises. It is a payment to common fund to be used for the benefit of the owners of the premises.
The payment by the member of the society is governed by the principle of mutuality and the society does not derive any income. We are therefore, of the view that the impugned addition cannot be sustained and the same is directed to be deleted.
Please red complete case study by google case name to get better clarity,.
Reference : Mitsutor Shipping Agency Pvt Ltd Vs DCIT (ITAT Mumbai)
Where it is held as below,
The payment of maintenance charges by the owner of the premises to the society can by no stretch of imagination be said to be a payment to contractor for carrying out work on behalf of the owner of the premises. These payments were made to defray common cause. There is no contract for maintenance between the society and the owner of the premises. It is a payment to common fund to be used for the benefit of the owners of the premises.
The payment by the member of the society is governed by the principle of mutuality and the society does not derive any income. We are therefore, of the view that the impugned addition cannot be sustained and the same is directed to be deleted.
Please red complete case study by google case name to get better clarity,.
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