Tds on fixed amount payment

Out client (Pvt Ltd co)is sharing office space with another individual, it has been agreed that a monthly consolidted amount will be paid the the individual against reimbursement of expenses. . Though the amount is reimbursement of various expenses eg.Rent, electricy, water & food etc. it is fixed for a month. The bills will be in the name of the indivisual. He can produce only a copy of the same.

My query is whether this payment will attact TDS if so under what section. Is there any way the company can avoid this?

Thanks a lot.

Replies (1)

Sharing of office space will attract teh TDS provision u/s 194I towards Rent.  if the pymt exceeds Rs.1.80lacs during the year then TDs will be required to be made @ 10%.  Reimbursement of exp to the individual means indirectly pymt of rent to the indvl for using the office space & incurring of  exp as stated above.

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