Applicability of TDS on SSLF paid by Petrol Pump

Hi Mohit,

Regarding the applicability of TDS on SSLF (Security Service License Fee) / LFR (License Fee Rental) paid by petrol pumps, here’s a detailed explanation:

1. Nature of Payment — Is SSLF/LFR Rent or Lease?

• SSLF or License Fee paid by petrol pumps is generally treated as rent for the site/land/building.

• Such payments fall under “Rent” as defined under Income Tax Act, 1961.

• The relevant section for TDS on rent is Section 194-I.

2. Applicability of TDS on SSLF / LFR

• Section 194-I requires deduction of TDS on rent payments exceeding Rs. 2,40,000 per annum.

• If SSLF/LFR payments cumulatively exceed Rs. 2,40,000 in a financial year for the same site, TDS must be deducted.

• Rate of TDS under Section 194-I (as per current provisions) is 10%.

3. Differentiating Site A and Site B

• If Site A and Site B are distinct locations with separate agreements, TDS calculation and threshold apply separately for each site.

• Payments made for each site should be considered independently for TDS applicability.

• If both sites belong to the same landlord and aggregate rent exceeds threshold, caution advised but generally treated separately unless agreement states otherwise.

4. Other Points

• If payment is to an individual/HUF, rate may differ (usually 10% standard).

• If landlord doesn’t provide PAN, deduct TDS at 20%.

• TDS must be deposited to the government and TDS return filed timely.

• Deductee should get TDS certificate (Form 16A).

5. Summary Table

Action Points for Petrol Pump Clients:

• Maintain records of SSLF/LFR payments for each site separately.

• Calculate total payment per site in a financial year to check threshold.

• Deduct TDS where applicable and deposit timely.

• Issue TDS certificates to landlords.