TDS on rent

Answer to TDS on Rent:

As everybody mentioned above, but in my view:

1. Upto 30.06.2010: TDS on rent is leviable only if net rent (after deducting Service Tax elements, in perusal of notification) exceeds Rs.1,20,000/- per annum. (i.e. Rs.10,000/- per month)

2. and 01.07.2010: on wards, if net rent exceeds Rs.1,80,000/- per annum (i.e. Rs.15,000/- per month)

In case of F.Y. 2010 - 11 (RAY 2011-12) first bifercate your rent according to per month payable and then apply TDS provision as mentioned above. As monthly payment, in your case, does not exceeds Rs.1,20,000/- (Rs.15,000 * 3 = Rs.45,000/-), upto 30.06.2010, TDS provisions would not be attracted.

Further, for balance period your rent for the entire period of F.Y. 2010-11 does not exceeds Rs.1,80,000/-, the provision of tax deduction not become operative in your case.

Answer to question of Service Tax:

The person who provides you property on rent he is under obligation to determine his service tax liability and accordingly collect from you and credit to the Central Government account.

However, the person should keep in his mind following points:

1. Consider entire gross rent receipt from every premises, except that rent element specifically exempted from the levy of service tax.

2. Consider value of other services which are specifically taxable under the Finance Act, 1994.

3. Consider other exemption benefit available if any.

4. If the person does not wish to take CENVAT credit for input, capital goods or input service tax than, it is eligible for exemption of small service provider under notification no.6/2005.

5. Avail benefit of value of service tax upto Rs.10,00,000/-

In your case, if we consider that you are having only one property which pays to the owner Rs.15,000/- per month than owner could not be brought under service tax net. In other situation, the owner has to consider all its taxable services.