Tds on rent

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Sagar Dave

CA Final CS Executive

33 Points Posted on 23 June 2015

Is TDS on rent applicable if Actual rental amount is lesser than 1,80,000 but due to service tax the expense increases above Rs 1,80,000. So should we deduct TDS or not?

Eg: Rent as per agreement is 1,68,000

Service Tax on same is 20,765

Total expense in P&L acount is 1,68,000+20,765=1,88,765

So TDS liability is attracted or not?

Also incase of tripartite agreement, if as per the agreement, Rent is paid to two parties, is TDS liability attracted if the total rental expense is more than Rs 1,80,000 but rent paid to each party is less than Rs 1,80,000 each.

Replies (10)

Pavithra

Student CA Final

46 Points Posted on 23 June 2015

Hi Sagar,

If Service tax is taken as expense and not as input credit, the same means rent exceeds Rs.180000 and TDS is applicable for the same. Also if rent is paid to more than one person, the individual limit of the co owner should exceed Rs.180000 to deduct TDS.

Rashi Bajaj

477 Points Posted on 23 June 2015

1. TDS is not chargeable on Service Tax portion. Therefore, no need to deduct TDS.

2. Limit of 1.8Lacs is available for both parties individually. Again, No TDS.

jatin aswani

ARTICLE ASSISTANT

72 Points Posted on 23 June 2015

1) Tds not deductible on service tax component if indicated seperately 2)partywise rent should exceed 180000, so no tds...

P-A-W-A-N

TAX - MANAGER AT GURGAON

473 Points Posted on 23 June 2015

No Requirement of Tds

Madhavan

Taxation Executive

38 Points Posted on 24 June 2015

yes i agree with Rashi Bajaj....

Raju (Meger, Aquisi,Takeover)

Audit Assitant

67 Points Posted on 24 June 2015

No TDS would be duduct on the service tax portion ,

dont mix the income tax law and service ax law

ThakurAnshdeepSingh

student

75 Points Posted on 24 June 2015

Isn't Rent limit changed to 250000?

Rashi Bajaj

477 Points Posted on 24 June 2015

No Anshdeep

Pavithra

Student CA Final

46 Points Posted on 24 June 2015

Hi all,

I agree that TDS should not be deducted on service tax portion but when it is shown as expenses in the books (not as service tax input) then TDS should be deducted or not??

Rashi Bajaj

477 Points Posted on 24 June 2015

The wordings of the section state as follows:

"The person (not being an Individual or HUF) who is responsible for paying any income
to resident by way of rent is liable to deduct tax at source in case the aggregate of the
amount 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 payee exceeds Rs.
1,80,000/-.

As Service tax cannot be the income of the recepient, no TDS can be deducted irrespective of the fact that you amy not utilize service tax input credit...