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Limit for non deduction of TDS

TDS / TCS 1203 views 2 replies
under Sec 194I no TDS needs to be deducted if rent paid does not exceed Rs 120000.What if the amount paid in current year exceeds Rs 120000 due to rent paid for last year which is paid in current year.Wether TDS needs to be deducted or no need for TDS as expense for current year does not exceed the limit specified.
Replies (2)

As per Income Tax TDS should be decucted at the time of Payment or Credit (Which ever is earlier) .

If  you make entries in last year and already paid TDS then no need to add the amount for this year.

 

>>Rajesh

It depends upon your method of accounting whether it cash or mercantile. If it is cash, rent paid is an expenses/charge for the year and hence, as rent exceeds Rs.120000/- , you have to deduct TDS. If it is mercantile, rent of the previous year must have already been accounted for and charged in the last year. The payment, of which you are making in current year, is towards your past liability. As a result, Rent for the current year does not exceeds Rs.120000/-. Hence, you are not required to deduct TDS there from.

 


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