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priyanshu gupta (Querist)
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13 April 2012 if we paid fixed generator rent of rs. 13000/-pm and also paying diesel expenses as per running hour basis i.e 300/- per hour what will be the TDS liability

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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13 April 2012 No doubt at all tds would be deduct under section 194I for rent paid of Rs.13,000 pm and the Diesel expenses paid of Rs.300 per hour would be liable for TDS under section 194C because nature of transaction or agreement indicates contract. However it would be treated as rent Because as per the terms and conditions or agreement fixed rent should be paid Rs.13,000 per month and in-addition to it Rs.300 per hour for the utilization hours of the generator. I.e minimum rent should be Rs.13,000 and actual rent would be depend on the utilization of the generator for such month.
My suggestion is TDS under section 194I is better for both because it would be proper for depending on the terms and conditions and however TDS as per 194I is more than the TDS as per 194C. If excess deduction of TDS than requirement of the act is doesn't arises any problems and not liable for any penalty.
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