Property related TDS queries

CA. Kirti S. Ganatra (Service) (1461 Points)
Replied 28 February 2008

Main threshold is if you pay rent for more than 120000/- in a year you have to deduct TDS. For other than company it is 15.45% for company it is 20.6% (if rent is less than 1 crore) if more than 1 cr than 22.66%. TDS rate on rent is not same as for other income. Yes TDS can be avoided if paid in diffrent name. You have to prove genuine ness of transaction if asked by department. If you are individual or HUF and turn over is less than 40 Lakh than TDS rule does not apply to you

S.Srinivasaraghavan (Chief Financial Officer and Co) (11318 Points)
Replied 28 February 2008

1)15% if payee is an individual or HUF;
20% in other cases. It is the aggregate of the amount of rent credited/paid or likely to be credited/paid (if exceeds rs 1,20000 to the payee in a financial year). Ofcourse you have to add applicable surcharge and cess.

2) TDS on rent is governed by section 194I at percentages specified therein stated as above, but the nature is same.

3)The company has to deduct TDS.

4) It is not possible to reduce unless the payee produces a certificate from tax authorities u/s 197, for deduction of lower tax.

P Gupta (practice) (75 Points)
Replied 01 March 2008

Thanks a lot for replies.

However, I am not sure if I got it all right due to some contradictions.

1) TDS is applicable ONLY if rent is more than 120000/- in a financial year. For example, lessee should not deduct TDS if apartment is rented for 8 months in a financial year @ 15000 per month (irrespective of other income of owner/Lessor/payee).

2) “If you are individual or HUF and turn over is less than 40 Lakh than TDS rule does not apply to you”
Is this comment referring to owner/Lessor/payee or for Lessee?
If it is referring to owner/Lessor/payee, TDS is NOT applicable if total income of owner/Lessor/payee, who is an individual, is less than 40 Lakh (even if rent is more than 120000/-).
If it is referring to Lessee, TDS is only applicable if income of Lessee, who is a company or individual, is more than 40 Lakh AND rent is more than 120000/-.

P Gupta (practice) (75 Points)
Replied 04 March 2008

Can someone help me to better understand the siutation, based on the details and exmaples I mentioned in my last post.

Thanks in advance.

(Guest)

Can you guide me whether tds is applicable on maintenance charges, if yest, what is the percentage for that.

thanks in anticipation

(Guest)

can you guide me whether tds is applicable on maintenance charges, if yes, what is the rate? please help me

thanks in anticipation

(Guest)

can you guide me whether tds is applicable on maintenance charges, if yes, what is the rate? please help me, Rs.5,000.00 per month as maintenance charges

thanks in anticipation

(Guest)

can you guide me whether tds is applicable on maintenance charges, if yes, what is the rate? please help me

thanks in anticipation

(Guest)

Hi,
I had brought property 2 years back and Ragistration is done in Oct 2006. I will be getiing possion of my flat in June 2008. My query is that is my builder is asking for VAT or Service Tax (5%) of contaract value now. Am I entitle for paying service tax on behalf of builder. Is there any such verdict passed by supreme court for builders because none of my friends Builders are demanding that.Please give me some information for this tax and ways to tackle this problem as amonut is tooo big for me.

Thanks,
Samir

(Guest)

T.D.S IS APPLICABLE TO ONLY FOR BUSINESS. I WANT TO IMPROVMENT MY HOUSE ,IS T.D.S IS APPLICABLE TO DEDUCT FROM CONTRACTOR.

(Guest)

i have to developed my ancsetral property upto 6 floor and thereafter i have given to developer 3 more floor incompensation to developed all floor,whather i have to deducted t.d.s from the contractor or not ?