GST and TDS interview questions

Hi ,

Recently our company take rented office premises in delhi, monthly rent Rs 60000 single agreement but we paid rent in three members 20000 each in this case TDS 194I(B) is applicable or not ? 

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...

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    ⚠️ 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