Tds on brokerage

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Chandresh Sanat Jatania

Chartered Accountants

60 Points Posted on 23 October 2015

Dear Esteemed Colleagues,

I request your assistance with regards the below:

Facts of the case are as under:

Four individuals jointly own a property which they have recently let-out. They are required to pay brokerage of Rs. 70,000 to an estate agent. None of these individuals are subject to audit or have a TAN allotted.

Query:

Are these owners required to deduct Tax on the brokerage?
If yes, request you to also answer the following:
1. What rate
2. Will it be on an individual basis or collectively? (Note : the rent is received individually and not as a group, AOP or BOI)
3. Will they have to get TAN for such deduction
Is there are exemption available in such cases

Please free to highlight any other detail, case laws for the above.

Thank you all in advance for all your replies,

CA CSJ

Replies (4)

Karthik.V.Kulkarni

Chartered Accountant

766 Points Posted on 23 October 2015

If the person paying tds is not liable to tax audit prev year then you need not deduct tds. This is only applicable in case of individual.

Guest

Posted on 23 October 2015

I think u should listen to Karthik's advice as he is right.

Miss Rinkal

Student

1497 Points Posted on 24 October 2015

Only individual and huf subjected to tax audit in the immediately preceding financial year, are subjected to deduct tax at source. Needless to say firm, aop, boi, company do not have such condition, which means tds will be deducted irrespective of turnover.

In the present case, all the four are individuals and will be assessed accordingly as there is no other formation of group. Since they are individuals and not subjected to tax audit for preceding financial year then they are not subjected to tds provisions. The answers to your Q2 and Q3 would not be applicable.