Query regarding tds on rent

it is better to book rent expenses in firm not in individual for tax benefits,

deduct TDS from firm and amount paid by partner on behalf of firm show it as capital contribution

if you have opted for 44AD then case will be diffrent

Originally posted by : faraz094
	One of my friend has started business by establishing partnership firm with his mother and he is paying rent on behalf of Firm Rs. 1,20,000 /-per month for Business place. The rent agreement executed between landlord and my friend. Now the question is whether he is liable to deduct TDS on rent ,as he is individual and were not liable for Tax audit during FY 2017-18. Because agreement was not made in the name of Firm.

If the firm is paying rent, then TDS is applicable. Who are the contract parties or whether tax audit is applicable, is not relevant here.

If you show the expenses in the books of accounts of the firm then you are liable to deduct TDS and if you are liable o Tax audit u/s 44 AB then you are liable to deduct tax @ 10%.

Section 194IB introduced by Finance act 2017, If an individual pay rent more than 50000 per month for residential or commercial purpose then TDS is required to be deducted @ 5% in the last month of financial year for whole year and tds is to be deposited by april 30, this section apply even if he is not covered under tax audit. Individual is not required to take TAN number. 

CA Umesh Kumar- 9717597230