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Tds On rent

lovebleritesh (accountant) (38 Points)

11 July 2011

Hello To All of u,

i have paid rent rs.15000 Factory Rent Per Month

And Paid rs.5000 For Machinery Per Month

Both Rent paid For One same Party

I had Deducted Tds Rs.300 For Per Month (15000*2%)

So This Is the Right Rate For Deducted Tds On Rent

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15 Replies

Mihir (Wealth Manager) (5293 Points)
Replied 11 July 2011

Rent - Plant & Machinery 2%

Rent - Others 10%

CA Abhiram Bharat. (Assistant Manager Taxation) (508 Points)
Replied 11 July 2011

actually TDS rates are as follows..

plant, mach, equipments-2%

others(land,bldg,furniture)-10%

the threshold is Rs. 180000.

now see.

ur total payment comes upto Rs.(15000*12)+(5000*12)= Rs.Rs. 240000.

now you should deduct TDS at the following rates

@ 2% on Rs. 60000

@ 10% 0n Rs. 180000.

please note that TDS should be deducted excluding the service tax component.

Also if the letting of machinery is on acount of a combined contract, means letting of machinery is the essence for letting of building, then TDS may be deducted on the entire Rs. 240000 @ 10%.

Kind regards-

Abhiram

1 Like

(Guest)

Factory Rent should be considered as premises and TDS should be deducted at 10%.

lovebleritesh (accountant) (38 Points)
Replied 11 July 2011

I Know The Rent On Tds But My Queation Is

Rate I Had Deducted The TDs Is Right Or Wrong...

(Guest)

Factory Rent should be considered as premises and TDS should be deducted at 10%.

Mihir (Wealth Manager) (5293 Points)
Replied 11 July 2011

Rent on Factory - 15000 = TDS Rs 1500/- pm at 10%

Rent on machinery - 5000 = TDS Rs 100/- pm at 2%

Let others confirm.

(Guest)

Agree with Mihir!

CA Abhiram Bharat. (Assistant Manager Taxation) (508 Points)
Replied 11 July 2011

yes..

rahul jain (student) (22 Points)
Replied 11 July 2011

Agree with mihir. that's correct.

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 11 July 2011

AGREE WITH MIHIR

CA,CMA,CS Karan Gogia (Employed) (230 Points)
Replied 12 July 2011

please read the provision, it will be more clear to u..

Any person, not being an individual or a Hindu undivided family, who is responsible for paying to ⁷¹[a resident] any income by way of rent⁷², shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, ⁷³[deduct income-tax thereon at the rate of—

⁷⁴[(a) two per cent for the use of any machinery or plant or equipment; and

(b) ten per cent for the use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings:]]

Provided that no deduction shall be made under this section where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year by the aforesaid person to the account of, or to, the payee, does not exceed ^74a[one hundred and eighty thousand rupees] :

u have paid (15000+5000)*12=2.4 lacs , u shud deduct 2% on mach.....and 10% on building..

(Guest)

@ lovebleritesh

u hav deducted wrong

as u hav deducted factory rent lesser by 1200/- and also

not deducted a total of 500/- on P/M rent.

Now u r liable for interest on TDS @ 1.5 % p.m on the amount not deducted .

Deva R (student) (83 Points)
Replied 12 July 2011

as the rent paid for building has not crossed 180,000(15000*12), Tax is not required to be deducted for building.(Only when rent paid crosses 1.8L TDS provision comes)

For machinery also the same, as it has not crossed 180,000, Tax need not be deducted.