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TDS on Reimbursement of Rent

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Nadim Khan

Accounts

30 Points Posted on 12 April 2010

Hi I want to know that my parent company has signed a lease with the landlord and we ( a group company with different name) are using some part of that leased area, the parent company is paying rent directly the landlord and is deducting TDS as applicable from the monthly payments and depositing same into govt. account under their TAN No., now the parent company want to claim some part of the monthly rent from us, so please advice that should I deduct the TDS on the reimbursement amount or not ? if yes then Why if no they why? and which section or law it comes under..

Replies (1)

Amir

Learner

4898 Points Posted on 12 April 2010

Dear Nadim,

TDS will be attracted u/s 194-I on payment being made to parent company if this amount exceeds the threshold limit specified u/s 194 I.

Reason - this ia nothing but a case of subletting- which is very well covered in the meaning of rent

rent” means 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

(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;