Tds on rent

If you read Sec 194I, Limit of 180,000/- p.a is to a person but not to a property.

So, if the payment to a person is not more than 180,000/- pa. need not to deduct tax.

And also limit is per annuam not per month.

Hi Manjunatha,

u r right ,limit of 1,80,000/- is P.A and to a Person.

But my question is as we are not issuing 5 checks to those 5 owners and we are making a single payment to a person other than owner for operational convinience of owners, do we need to deduct TDS on payment to a single person per year rs.4,80,000/-?

As per my view there is no need of deducting TDS because payment is made to one person on behalf of the five persons and the rent income will be shown by the five persons not by the person who is receiving the cheque.

It is depend up on the agreement,

if the cheque is consolidated cheque then tds is required to deduct as it cross the limit.

Any other opinions please..................

Dear santosh,

as earlier said the limit of 180,000 is against the person and not to a property,

if u pay as rent to a perticuler person and if the thresehold limit crocess then required to deduct TDS, if not Crocees the limit individualy then no need to deduct TDS.

take an example,

inthe same case there is HUF and have 5 members have shares in the same HUF,

now as per the agreement for which member of HUF limit crocess, required to deduct TDS, if limit not crocess individualy then no need to deduct TDS. TDS only deducted for thos member whose thresehold limit crocess.

thanks 

"owners of the property are 5 members who has definite share in the property "

Hence no TDS

" under section 194-I, the tax is deductible from payment by way of rent, if such payment of the payee during the year is likely to be Rs. 1,80,000 or more. If there are a number of payees, each having definite and ascertainable share in the property, the limit of Rs. 1,80,000 will apply to each of the payee/co-owner separately. "

No TDS deduction will apply only if , you have issued 5 different cheques. Also you have to check for definite share i.e. if there are 5 co-owner where share of one co-owner is 200000 and rest are in 280000 or wahtever the combination but if any one of them is crossing as per his share a limit mentioned in 194 I then you are require to deduct TDS.

The logic behind such provision is under House Property all these 5 co-onwers will be subject to Tax as per THEIR SHARE only. Here the portion of Rental Income  is limited to
their share only. TDS is a tax to be applied on Income Payable to payee. That's why here they have mentioned that threshold limit of Rs. 180000 will apply to EACH co-owner & not as consolidation.
 

Tds on Rent is to be deducted @ 10% if the Rent payable is more than 1,80,000 p.a. per person

Moreover, this is exclusive of Service Tax