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TDS on rent

snambiraajan (consultant) (98 Points)

27 May 2011  

dear professionals,  pls. let advice me to workout on the TDS  deductable percentage and the workings if the Commercial building had been taken for 15,000.00 per month.  and will attract any service tax on this?


 19 Replies

praveen (Chartered Accountant) (6878 Points)
Replied 27 May 2011

Service tax is applicable only if it exceeds Rs.10,00,000/-

and TDS has to be deducted if the amount exceeds Rs.1,50,000/- per annum
 

1 Like

vijaya simha P (Auditor and Tax Consultant)   (39 Points)
Replied 27 May 2011

TDS shall be Deducted at 10% if it exceeds Rs.1,80,000/- PA. and service Tax is applicable at 10.30% if the gross rent exceeds Rs.10 LakhsPA
2 Like

Lakshy (Semi-Qualified C.A. PGDFM BCom.)   (1765 Points)
Replied 27 May 2011

TDS on Rent is 10% if amount of Rent exceeds Rs. 1,80,000/- p.a. and Service Tax is applicable at 10.30% if the Gross Rent Exceeds Rs. 10 Lakhs p.a.

TDS deduction is obligation for Person who pays rent and

Charge of Service Tax is obligation for a person who received rent.

2 Like

CA NITUL MEHTA (KPMG-Senior Consultant-International Tax )   (236 Points)
Replied 27 May 2011

till 30-6-10 it is rs 12000/- pm for not coming under tds provisions and from 1-7-10 15000 pm is the maximum rent for not coming under the provisions of rent i agree with service tax views above but from 1-4-11 to deduct  tds minimum rent must be 15000 pm and rent is the only item among all the payments liable for tds where tds is not to be deducted on service tax part for e g : if rent is 1500000/- and service tax comes to rs 154500/- so tds is to be deducted by payer of rent on 1500000/- only and not on 1654500/- (1500000+154500).

4 Like

CA. Manoj Joshi (CA, CS and CMA) (134 Points)
Replied 27 May 2011

TDS @ 10% if rent exceeds rs. 180000 p.a. and service tax @ 10.30 if gross rent exceeds rs. 1000000 p.a.

1 Like

nitish pawar (article..) (176 Points)
Replied 27 May 2011

tds on rent is applicable @ 10% but after adding service tax and up to 180000 rs. tds is not applicable

service tax is applicableon amount  more than 10lacs rs. so

1 Like

CA NITUL MEHTA (KPMG-Senior Consultant-International Tax )   (236 Points)
Replied 27 May 2011

 

Clarification on deduction of tax at source (TDS) on service tax component on rental income under section 194-I of the Income-tax Act

CIRCULAR NO. 4/2008, DATED 28-4-2008

 

Representations/letters have been received in the Board seeking clarification as to whether TDS provisions under section 194-I of the Income-tax Act will be applicable on the gross rental amount payable (inclusive of service tax) or net rental amount payable (exclusive of service tax).

2. The matter has been examined by the Board. As per the provisions of 194-I, tax is deductible at source on income by way rent paid to any resident. Further rent has been defined in 194-I as

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

(c) land appurtenant to a 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;

3. Service tax paid by the tenant doesn’t partake the nature of income of the landlord. The landlord only acts as a collecting agency for Government for collection of service tax. Therefore it has been decided that tax deduction at source (TDS) under sections 194-I of Income-tax Act would be required to be made on the amount of rent paid/payable without including the service tax.

4. These instructions may be brought to the notice of all officers working in your region for strict compliance.

5. These instructions should also be brought to the notice of the officers responsible for conducting internal audit and adherence to these should be checked by the auditing parties.

[F.No.275/73/2007-IT(B)]

2 Like

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 27 May 2011

TDS shall be Deducted at 10% if it exceeds Rs.1,80,000/- PA

1 Like

Ranjeeth Balasundaram (CA) (41 Points)
Replied 27 May 2011

In your case of 15000/-per month rent terms to 1,80,000/- per year so TDS Provision as well as Service Tax payment does not apply to your case .

2 Like

Ranjeeth Balasundaram (CA) (41 Points)
Replied 27 May 2011

In your case of 15000/-per month rent terms to 1,80,000/- per year so TDS Provision as well as Service Tax payment does not apply to your case .

1 Like

Pavan Bharadwaj (Practicing Chartered Accountant)   (353 Points)
Replied 27 May 2011

From 1.7.2010 TDS need not be deducted if payment is less than or equal to 180000 p.a or 15000 per month.

1 Like

Mukesh Kumar Gupta (Accountant ) (66 Points)
Replied 27 May 2011

TDS shall be Deducted at 10% if it exceeds Rs.1,80,000/- PA.as per under sec. 194I. in your case tds & sevice tax both are does not apply.  

Lets see the chart for F. Y. 2011-12.

1 Like

Ravindra kumar (student) (87 Points)
Replied 27 May 2011

According to income tax act 1961 AY 2010-11 tds limite is 1,80,000/-  under section 194 I will be deducted @ 10% and service tax imposed on the amount  10,00,000/- exceed per annum @ 10.3%

1 Like

satish kumar (accountant) (258 Points)
Replied 28 May 2011

TDS shall be Deducted at 10% if it is more than  Rs.1,80,000/- PA. on whole amount paid and srevice tax applicable @ 10.30% oh the receipt of ore than Rs 10.00 lac.

1 Like

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