TDS-Rent

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 December 2010 Company has paid 3 mth rent as deposit but in agreement it is specified that the deposit is not refundable and will be adjusted in future rent. Now what is the tax implication on licensee side from tds angle. PLs advice

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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16 December 2010 TDS need to be deducted on such deposit u/s 194I @ 10%.

CA Abhishek Goel

CA Abhishek Goel (Expert)
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16 December 2010 TDS will be deducted in the month in which he will book his income.that is if he has taken 9000 in advance and treat 3000 rent for first month and further than on 3000 tds will be deducted respectively as per section 194 I

Selvakumar Selvaraj

Selvakumar Selvaraj (Expert)
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17 December 2010 At the time of deposit TDS need not to be deducted but when the deposit amount adjusted against Rent, it is subject to TDS.(Accordingly you have to either pay TDS out of packet and get it from them or incur it as your expense)

Shyam Lal Naik

Shyam Lal Naik (Expert)
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17 December 2010 Agree with Sanjay.

TDS has to deducted either at the time of credit to the account of the payee or payment, which ever is earlier.

Hence, TDS shall be deducted @ 10% at the time of payment of advance rent.

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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17 December 2010 Agreed With Sanjay Ji & Naik Ji.

In agreement it is clear that deposit will be adjusted agaisnt rent i.e it is treated as advance payment of rent not deposit.