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Tds on rent

RAJAT GARG (Practicing Chartered Accountant) (25 Points)

06 July 2012

I have a query about tds on rent

For Eg.

(Figure for a month only)

Basic rent: 20088

Property tax: 1198

Service tax: 2069

Water charges: 100

Now I wanted to know that on how much amount tds has to be deducted & also TDS Amount

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27 Replies

nitin suvarna (C.A FINAL) (828 Points)
Replied 06 July 2012

if u consider property tax & water chgs as part & parcel of rent as per the agrrement or by mutual understanding then tds on whole amt (exclusive of s.t ) or otherwise it will be on Rs 20088 (since tds on rent is always exclusive of s.t)

regards,

nitin

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nitin suvarna (C.A FINAL) (828 Points)
Replied 06 July 2012

Also tds limit for rent is Rs 180000 p.a

CA Neelesh Sharma (2) (69 Points)
Replied 06 July 2012

TDS deducted on rent U/s 194(I) is always exclusive of service tax as per the clarification given by CBDT.

1 Like

RAJAT GARG (Practicing Chartered Accountant) (25 Points)
Replied 06 July 2012

thanks a lot

CA.Saibaburao Nanduri (Chartered Accountant) (3847 Points)
Replied 06 July 2012

Dear Rajat Garg !

For better understanding let us examine the extract of Section 194 I

Any person, not being an individual or a Hindu undivided family, who is responsible for paying any income by way of rent, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof at the rate of—

(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)

If such rent is below Rs. 1,80,000/-, TDS deduction is not applicable

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Santosh V. Thakur (Sr. Accountant) (187 Points)
Replied 06 July 2012

i agree with @ Mr Nanduri..

Mr. Rajat Garg !

Further as you given example of Rent, service tax charged (10.30%) on Only rent, not on property/water bill.

Property tax / water bill is expenses recovered from you, hence no question of TDS on Property/Water bill as this is not income of such person.

You charge tds on rent as per income tax rule as below.

(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)

If such rent is below Rs. 1,80,000/- (per annum), TDS deduction is not applicable

shibu (Accountant) (325 Points)
Replied 06 July 2012

Service tax need not be taken for calculating TDS

Deepak Parsai (Future CA) (623 Points)
Replied 06 July 2012

Agree with Santosh, a very logical answer is given by him as property/water tax is not income,but it depends on agreement, if tenent paid it as per term of agreement then it is a part of rent and should add in limit of 180k. No tds on Service tax.