Payment by Developers during Redevelopment

TDS 500 views 4 replies
User Avatar

Nil
36 Points Joined November 2024

Respected Sir,

Our Society will undergo renovation and the Developer will provide compensation for Rent and other expenses incurred to each member. 

Will this compensation of Rent for the temporary accomodation be subject to TDS?

Kindly guide.

Thank you
Sincere Regards

0 Reply Share Follow
On 10 December 2024 at 08:57 Report
Replies (4)
User Avatar

Master in Accounts & high court Advocate
9434 Points Joined December 2011

TDS on Rent Compensation As per the Income-tax Act, 1961, TDS is applicable on rent payments exceeding ₹2,40,000 per annum.

However, in your case, the compensation is for temporary accommodation due to renovation.

Exemption from TDS The compensation for rent and other expenses incurred due to renovation is exempt from TDS under Section 194-I of the Income-tax Act, 1961.

Conditions for Exemption To qualify for exemption, ensure:

 1. _The compensation is for temporary accommodation_: The compensation should be specifically for temporary accommodation due to renovation.

 2. _The compensation is not in the nature of rent_: The compensation should not be in the nature of rent, but rather reimbursement for expenses incurred.

 3. _The developer is providing the compensation_: The compensation should be provided by the developer, and not by the society or its members.

Documentation and Reporting Although TDS is not applicable, it's essential to:

1. _Maintain proper documentation_: Keep records of the compensation, including the amount, purpose, and recipient.

2. _Report the compensation in the tax return_: The recipient should report the compensation in their tax return, if applicable. 

Reply
On 10 December 2024 at 09:41
User Avatar

SEO Sai Gr. Hosp.
208085 Points Joined July 2016

The compensation for rent is exempt up to the limit of actual payment of temporary rent. 

Reply
On 10 December 2024 at 09:42
User Avatar

Nil
36 Points Joined November 2024

Respected Sir,

Thank you. Noted all the points.

Sincere Regards

Reply
On 10 December 2024 at 12:11
User Avatar

Nil
36 Points Joined November 2024

Respected Sir,

Thank you. Noted all the points.

Sincere Regards

1 Reply
On 10 December 2024 at 12:11


CCI Pro

Leave a Reply

Post Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Recent Threads

More recent discussions | Post

Related Threads
Loading