Regarding Rental Income And TDS deduction.

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RUDRA

Income & Corporate Tax Lawyer

262 Points Posted on 24 July 2023

I am contractor, generally companies like Mahindra they take properties on rent from me. .. for a yard. They store vehicles. I took responsibility of their vehicles and store them in this yard.

I provide them property for it.
but.. the property I give them I also take that property on rent.
Now, company deducts TDS on rental income.
its a huge amount.
according company should deduct TDS on the basics of 194C because I'm a contractor instead of 194Ib.
I agreement of rent is between me n party not with Mahindra.
Thn Mahindra can deduct this tax in 194Ib.
Please give ur suggestions.

Replies (6)

Quick Summary

This discussion centres on a contractor who owns a property used by companies like Mahindra to store vehicles. The contractor is responsible for vehicle storage, maintenance, and even repossessing financed vehicles. The core issue is that companies are deducting TDS under Section 194IB (for property rent) instead of Section 194C (for contractor services), which the contractor believes is incorrect given the broader responsibilities involved. Advice suggests that while 194IB might apply to the rent portion, other services could fall under 194C, potentially allowing for a bifurcation of TDS.

NARENDRA

ACCOUNTS MANAGER

1041 Points Posted on 25 July 2023

As I understand your problem , I think ,Though you are not only giving your property for rent but you also took the responsibilities of the maintenance of their vehicles , & the maintenance responsibilities coming under the contractorship as the company thinks. Though you are a lawyer Rudra, I think you better understand the language of Law which is written in the agreement .

shanaaaaa10

norton

30 Points Posted on 25 July 2023

As I understand your problem , I think ,Though you are not only giving your property for rent but you also took the responsibilities of the maintenance of their vehicles

RUDRA

Income & Corporate Tax Lawyer

262 Points Posted on 25 July 2023

Actually.. in this discussion.. I given some facts wrongs.
Real prblm is.
That I'm the owner of the property. I use to work with the company's like Mahindra n all. I haven't done any agreement with companies except that the profit ratio will be 70:30.
business is like.. I own the property.. companies send their vehicle to store at my property. I store them at my property called as yard. For Rest of the things I take care.. like maintenance labor and all.
Companies business is like.. they catch that vehicles whose owners are not able to financed amount of loan.
For this too.. I'm responsible.
They will issue a notice.. we catch the vehicle store it our own place.
Now prblm is that i haven't done any agreement with company.. but then also they deducted tax in 194Ib.
My point is that they should deduct the money in 194C.
Response Regarding this prblm.

NARENDRA

ACCOUNTS MANAGER

1041 Points Posted on 25 July 2023

I think Company is right Rudra,because they stored their vehicles at your Godown or yard against rent & that's why they deduct TDS under 194IB. But I think the maintenance ,Labour & other things will come under 194C so you can demand that the amount should bifurcate in rent in 194IB & the other things in 194C.