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Rent on tds

Ramanuj (Accountant.) (834 Points)

11 January 2012

Dear all

Tds on rent. TDS deducted excluding service tax or not. Suppose any one bills raise 187510/- as Breakup 170000/- rent 17000/- service tax & 510/- cess TDS deducted will be on 187510/- or 170000/- Pls inform us

Thanks

With regard

Ramanuj

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6 Replies

valji (Accounts manager-MBA) (2150 Points)
Replied 11 January 2012

service tax charged on rent when exceed 10 lakhs

but if bill come you have to deduct TDS @ 10% on RS 170000

Vineet Goyal (Assistant Manager - Finance & Accounts) (702 Points)
Replied 11 January 2012

TDS 10% on Rs 170000

Chetan Prajapati (CA) (22 Points)
Replied 11 January 2012

Yes, TDS will be deducted only on rent amount excluding service tax, if rent amount exceedRs. 180000/- during the year (W.E.F.01/07/2010).

Yogesh Bhandari (CA FINAL Student) (429 Points)
Replied 11 January 2012

Yes, TDS will be deducted only on rent amount i.e., TDS deducted will be on 170000/-

CBDT Circular No.4/2008 dated 28.4.2008 provides clarification on deduction of tax at source (TDS) on service tax component of rental income under section 194-I.

As per the provisions of 194-I, tax is deductible at source on income by way of rent paid to any
resident. Further, rent has been defined in 194-I to mean any payment, by whatever name
called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the
use of (either separately or together) any,-
(a) land; or
(b) building (including factory building); or
(c) land appurtenant to a building (including factory building); or
(d) machinery; or
(e) plant; or
(f) equipment; or
(g) furniture; or
(h) fittings,
whether or not any or all of the above are owned by the payee.
Service tax paid by the tenant doesn’t partake the nature of income of the landlord. The
landlord only acts as a collecting agency for Government for collection of service tax.

Therefore, tax deduction at source under section 194-I would be required to be made on the
amount of rent paid/payable without including the service tax.