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Tds on rent

05 September 2014

Mr. A pays 6 months rent in advance to Mr. B at the starting of half yearly i.e., 1st January 2014 Mr. A pays rent(Rs.10,000/- per month * 6 months = 60,000/-) for Jan to June.This payment method is mentioned in Rent Agreement made between two of them. Mr. A deduct TDS on 1st January(60,000/-*10%=6,000/-) for all the payments (as the payment is earlier than Income booking). Now Mr. B is filing Income Tax Return. How much TDS credit he can claim in the FY in question?(3,000/- or 6,000/-). How much Income must he book for this FY?

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2 Replies

shiwani vaishnav singh (Sr. Accountant) (32 Points)
Replied 06 September 2014

Income tax credit can b availed according to the financial year I.e jan to march 14 becoz tds filed accoding to the qtr and F.Y.

CA Gaurav Goyal (CA) (86 Points)
Replied 06 September 2014

Ok this point may be genuine.. that Mr.A will book expense for only 3 months and remaining 3 months will be advance paid at the year ending. Mr. B will also book income for 3 months and remaining will be advanced received. And accordingly Mr. A will file return with 3,000/- as TDS deducted for this year and remaining 3,000/- will be filed in the quarter ending June 2014. For this Mr. A will have to pay TDS in 2 challans for 3 - 3 months separately.

!!!!Great Suggestion by Expert Shivani.!!!!

But in my case Mr.A has filed TDS Return with a TDS booked in the quarter ended March 2014 of Rs.6000/-. Mr. B has booked income of Rs. 30,000/-(i.e., for only 3 months). Mr. B cannot claim TDS more than on income booked in this year, hence only 3,000/- is allowed. Now how to claim the another 3,000/- of TDS..