TDS on Agriculture land rent

Dear Sir/madam,

 

I would like to know if a research company hire agriculture land to grow paddy for R&D purpose and the rent would be 5,00,000/- PA. Do we need to deducted TDS?

 

Please confirm under which section do we need to deduct TDS? Sec 194I or 194C?

 

With advance thanks

Pradeep Kumar T V

Replies (4)
Yes TDS is required to be deducted under section 194I

1. As per sec 2(1A), rent received from a land that is used for an agricultural activity will be covered under agricultural income and subsequently exempted from payment of tax. 
2. There is no doubt cultivation of paddy is an agricultural activity. Now the question is whether R&D expenditure incurred on the growing of paddy will be covered under agricultural activity. 
3. In my view, it is very much an agricultural activity and if so, it will be exempted from payment of tax and TDS need not be deducted on the same. 
Please correct me if the above solution has an alternative view. 

TDS provisions flow from Section 4 in respect income chargeable u/s 4. Constitution does not constitute power to CG to levy tax on Agricultural Income (AI) and hence Section 4 does not apply to AI and hence not includible in total income.

However, there may be an issue of integration of agricultural and non-agricultural income. And since there is a hidden tax levy on agricultural income and TDS is only a mode of recovery of tax, it is advisable to deduct tax

Rent receipt by Agri land owner from a person for using land for Agri purposes will be considered as Agri income and it will qualify for exemption under 10(1).

But the onus of TDS non Deduction will be on Research company and that's why research Company will prefer to deduct TDS and request the land owner to claim in his ITR.

One more way is to apply for a nil rate certificate from department by Land owner and furnish it to Research Company.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
Featured 27 October 2026
semi-qualified CA

Saini Pati Shah & Co LLP, Chartered Accountants

Mumbai

CA Final

View Details
Company
15 October 2026
Senior Accountant

Continental Belting Pvt Ltd

Mumbai

B.Com

View Details
Company
30 October 2026
Asst Manager Accounts

Goodwin Pumps India Pvt Ltd

Chengalpattu

CA Inter

View Details
Company
31 October 2026
Accountants

sankaran and krishnan

New Delhi

B.Com

View Details
Company
13 October 2026
Accountant

Zerdi & Co. Chartered Accountants

Pune

B.Com

View Details
Company
Featured 03 October 2026
Accountant

A P Lodha and Associates

Jalna

B.Com

View Details
Company
12 October 2026
Finance

I-Genext Consulting Private Limited

New Delhi

CA

View Details
Company
05 October 2026
Senior Accountant

Vision IT Peripherals Pvt Ltd

Mumbai

B.Com

View Details