GST and TDS interview questions

Hi Manjunath,

Please find the answer to your question:

Payer: A company (not an individual or HUF) ✅
Payee: Three different individuals (landlords) ✅
✅ Single rent agreement with a company, and
✅ Total rent is 60k month
Now, let's interpret this strictly with reference to Section 194-I

Section 194-I – Key Language:

"...where the income by way of rent credited or paid for a month or part of a month by such person to the account of, or to, the payee, does not exceed ₹50,000."

So, TDS applicability is assessed per "payee", i.e., per landlord.

In Your Case:

If rent is paid 20k to each of 3 landlords, then:
- Per payee: 20kmonth ✔️
- Each below 50k ✔️
- No TDS under Section 194-I ✅
  
  BUT...
  
  ⚠️ Complication – Single Agreement
  
  While the rent is split, the single lease agreement can imply joint ownership or joint letting. In such a case, courts and the Income Tax Department may view the total rent of 60k as being jointly received by the three individuals — as one income stream.
  
  👉 Then, the company is paying 60k to a group of payees under one contract — and TDS applicability may be assessed on the full amount, not per individual.
  
  ✅ Conclusion (with reference to Section 194-I only):
  
  If the rent agreement specifies separate shares and payment is made separately (20k each), then no TDS is applicable under Section 194-I because rent per payee < 50k/month.
  
  However, if the agreement is silent or shows the three landlords as joint owners (without clear rental share), then TDS on 60k @ 10% = 6k/month should be deducted under Section 194-I.
  
  ✅ Safe Practice:
  
  To avoid disputes:
  - Ensure the agreement clearly mentions each landlord’s share
  - Ensure payments are made individually (not lump sum)
  - Mention PAN of each landlord separately in TDS return (if deducted)Regards,
    S Ram