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Tds on Rent

CA Mohd Gouse (Chartered Accountant) (497 Points)

24 July 2008

hello friends.

i have question to ask. there is one party to whom we pay Rent for Office premises Rs. 30k p.m this year (F.Y 2008-09) we paid him Rs.1.2 lac for the period April to july 2008 on monthly basis.we have not deducted TDS becoz agrement for only this period only, \but now it extended to oct 2008.now if we pay him rent then we need to Deduct TDS.now party say don't Deduct Tds may rent in the name of my Wife or .in His aonther Company name.

is it Rite if we pay Rent to other person without Deducting TDS....??? let me know........

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4 Replies

CA Nallathambi Srinivasan (Audit Team Member) (1584 Points)
Replied 24 July 2008

Originally posted by :mohd gouse

hello friends.
i have question to ask. there is one party to whom we pay Rent for Office premises Rs. 30k p.m this year (F.Y 2008-09) we paid him Rs.1.2 lac for the period April to july 2008 on monthly basis.we have not deducted TDS becoz agrement for only this period only, \but now it extended to oct 2008.now if we pay him rent then we need to Deduct TDS.now party say don't Deduct Tds may rent in the name of my Wife or .in His aonther Company name.
is it Rite if we pay Rent to other person without Deducting TDS....??? let me know........

My opinion is, if suppose he wants the chq in different name, then new agreement should be made between the new party (his wife and you) or (his company and you) for that also, the property should be in the name of new party or the power of attorney to rent out the premises by the new person should be executed by the existing person.

CA Mohd Gouse (Chartered Accountant) (497 Points)
Replied 24 July 2008

he wants to avoid TDS that' the reason he want chq on others name..so it it okay to pay other people without tranfer of ownership of that assest(premises)....???

(Guest)

Hey,

The rent should be paid to the owner of the property with whom u ve made agreement. Ensure who is the owner. whether he or his wife or property held in joint names. Only with the owner of the property you can enter into a valid agreement.

Provided he is the owner ask him to give certificate for no dedcution of tax obtained from Inc Tax dept. Otherwise proceed to deduct tax.

N.B Rent paid without dedcution of tax will attract interest and penalty and disalloance of such amount in your total income.

all d best

Deepak (Auditor) (22 Points)
Replied 25 July 2008

Originally posted by :mohd gouse
"	he wants to avoid TDS that' the reason he want chq on others name..so it it okay to pay other people without tranfer of ownership of that assest(premises)....???	"