TDS U/S 194Q ON ELECTRICITY CHARGES

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This discussion explores the applicability of TDS under Section 194Q on electricity charges. The user pays significant monthly electricity bills for their manufacturing unit, exceeding the Rs 50 lakh threshold, and deducts TDS accordingly. However, they also pay electricity bills for their leased corporate office, which are in the individual landlord's name and individually fall below the threshold. The core question is whether TDS needs to be deducted on these corporate office electricity bills, especially since the electricity department shares the same PAN for both locations.

K BHEEMA REDDY

K BHEEMA REDDY (Querist)

12 August 2021 Dear sir,
As per Sec 194Q it is mandates buyer to deduct tax @0.1% at the time of payment or at the time of Purchase value exceeds Rs 50,00,000 which ever is earlier
In our company we have manufacturing unit and we are paying electricity bill more than 50 lacks every month and deduct TDS @ 0.1%. up to this we have clarity on provision,.,
here our corporate office is also situated in same area and taken for lease rental basis from individual, as per rental agreement electricity charges will be born by lessee (i.e. company) and electricity charges bill is generated on individual name and electricity charges will be paid by company every month Rs 100000. (below 50 lakhs relating to corporate office)
here my doubt is whether TDS will deduct or not , on corporate office electricity bill (Because here electricity department is having same pan for both manufacturing unit and corporate office and electricity bill is generated on individual name).

Thanks in advance
Regards,
Bheema Reddy.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

12 August 2021 Deduct TDS so that you will not face any problem.

K BHEEMA REDDY

K BHEEMA REDDY (Querist)

12 August 2021 Dear sir,
Electricity department is challenging how you will deduct TDS u/s 194Q, Because we are issuing electricity bill on individual name (building owner name) but not on company name and electricity bill per year is below 5000000 on individual name.

Thanks & Regards,
Bheema Reddy.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

13 August 2021 Since you are paying the bill the argument is not acceptable. Deduct TDS.

K BHEEMA REDDY

K BHEEMA REDDY (Querist)

17 August 2021 K..K Sir Thank you very much sir.

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