I know that there is a exemption limit for TDS on Rent payment i.e.180000/- P.A. But i have a query that if the rent payment exceeds180000/- than the TDS will be deducted on the whole payment or only on the portion which exceeds180000/-
For. E.g. If i am paying a rent of20000/- p.m. i.e.240000/- p.a. than i will liable to deduct tax on60000/- i.e. the portion which exceeds180000/- or on the whole of240000/-
Dear Rahul
As per section 194I Liability of TDS will automatically arise as soon your liability for rent exceed 180000/- p.a. You are required to deduct TDS on whole amount rather than the excess amount over and above 180000/-.
Thus in your case you are required to deduct TDS on the whole amount of Rs 240000.
You may reach me on cagarg.saurabh @ gmail.com
Whole amount.
Yes ofcourse you do it. after 180000 TDS deducted automaticaly on your above rent.
TDS @ 10% will be deducted on whole amt. of Rs.240000/-
agree with manish
TDS will be deducted on whole amt i.e. 240000/-
earlier it was 120000 ...now with new amendment its 180000...
totally agreed with....poonam ji and manish ji
Thanks for the details as you all said that the TDS will be deducted on the whole amount than along plz answer my one new query as follows:
Suppose i am paying a rent of Rs. 15000/- p.m. starting from april 2010 and consequently as it under the Exemption limit so there is no need to deduct tax. But from October 2010 rent has been increased to Rs. 18000/- p.m. and due to this increase the exemption limit will be crossed as the total annual rent for the f.y. 2010-11 will be
15000 X 6 = Rs. 90000
18000 X 6 = Rs. 108000
Total Rent = Rs. 198000/-
As from october i will start deducting tax @ 10% but how will i deduct tax for those rent payments which i have already paid without deducting tax i.e. before October. Should i deduct excess tax from October Payment or Not ? If not than the criteria for tax on whole amount will not apply.
Please clarify
In this case you should deduct tds on the month , where it expected to cross the threshold limit .. like in the month of FEB -2011 and MARCH-2011
In Feb 2011 @ 10% on Rs 1,80,000 = Rs 1800
In March 2011 @ 10% 0n Rs 1,98,000 = Rs 19,800 (but earlier paid Rs 1800 in Feb) , So liability comes (19,800-1,800) Rs 18,000
TDS will be deduted on rent exceeds threshold limit of Rs. 1,80,000/-, but tds will not be deducted on service tax if charged in the bill.
As you are aware that this rent payment is going to be liable for TDS deduction, i will suggest that you should start deducting the TDS from the very 1st Month in order to prevent the huge amount of deduction at the end.
Ashutosh, your calculations are wrong, instead of 1,800 it should be 18,000
Dear Mohit
Liability for TDS u/s 194 I will automatically start as soon as the annual rent exceed theshhold limit of Rs 180000 p.a.
Hence in your case rent for two month comes to 80000 which is below the threshhold limit of Rs 180000 thus not liable for TDS deduction.
You may reach me at cagarg.saurabh @ gmail.com
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