“Discussion Paper on Direct Taxes Code 2009” , Chapter – VIII, “Computation of Income from house property”, 8.2(g). Rent
1. Sec.23 (1) of “Direct Taxes Code 2009” says “The income from any house property owned by the person shall be computed under the head “Income from House property”.
2. “Discussion Paper on Direct Taxes Code 2009” , Chapter – VIII, “Computation of Income from house property”, 8.2(g) says “The Income from property shall include income from letting of any buildings along with any machinery, plant, furniture or any other facility if the letting of such building is inseparable from the letting of the machinery, plant, furniture or facility”.
3. Now, confusion creeps in here about the rate for “Deduction of tax at Source”., The Third Schedule of “Direct Taxes Code 2009”. Rule 11, says as follows :
Rent
(i) For the use of machinery or plant or equipment Rate of TDS is “ONE PER CENT”
(ii) For use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings, Rate of TDS is “TEN PER CENT”.
Now question is in a situation where an assessee receives rent on “a building along with any machinery, plant, furniture or any other facility, where the letting of such building is inseparable from the letting of the machinery, plant, furniture or facility”, should the same be subjected to the rate of TDS @ “One per cent” ?
Or @ “TEN PER CENT”? as per this new “Direct Taxes Code 2009”.
Is this ambiguity in this new “Direct Taxes Code 2009” not defeating the very purpose of “ Reducing the scope of litigation. Wherever Possible, an attempt has been made to avoid ambiguity in the provisions that invariably give rise to rival interpretations.”
From
Venkateswara Rao Sapare,
CAclubindia
