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Tds on rent

PRADIP PATWARDHAN (Accountant) (68 Points)

08 September 2017

Dear exprt i have query as per following..
if ABC pvt ltd company paying rent to XYZ pvt ltd company for accomodation for their staff. yearly rent amount is Rs.180000/- which is below applicable amount for TDS. But now service provider i.e. XYZ pvt ltd co. charging GST in their monthly rent bill and including GST amount total amount payable by ABC pvt ltd co is exceeding Rs 180000/- then Whether ABC co ltd have to deduct TDS from monthly amount payable to XYZ con means is TDS applicable in this case? please reply.

thanks & Regards,

Pradip Patwardhan

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6 Replies

(Guest)

yes tds applicable

PRADIP PATWARDHAN (Accountant) (68 Points)
Replied 08 September 2017

thank you for your reply. Would please mention supporting Notification , article etc in this regards

learner (nil) (243 Points)
Replied 10 September 2017

NO,TDS will be deducted only on the amount of rent, not on GST amount so if ur rent payment is not exceeding 180000 then you dont need to deduct tds, bcoz GST is not income for the landlord so it is not subjected to income tax.

ujjaishravan (accountant) (212 Points)
Replied 10 September 2017

CIRCULAR No. 23 /2017 clarifies wherever GST charged seperately, then No TDS to be deducted on GST amount. Hence No TDS to be deducted on the Rent amount which is stilll under the threshold Limit. However you have to mention this rent paid and non deduction of TDS in the quarterly TDS statement, mentioning the code for under "Threshold Limit".

PRADIP PATWARDHAN (Accountant) (68 Points)
Replied 11 September 2017

Thank you expert for your reply..

with circular no 23/2017 it is clear not to deduct tds on gst component but the circular not clarifying due to GST component if annual paid / credited amount crossing threshold limit i.e. 1.80 lakh then not to deduct TDS on amount excluding GST. So it is requested would you please provide circular/notification in this regard so we can keep the same with us to valid reason for non deduction of TDS if in future assessing officer challenged non deduction of TDS on rent even total amount paid/credited crossed threshold limit.

thank you.

ujjaishravan (accountant) (212 Points)
Replied 14 September 2017

Dear Pradip,

While considering the amount paid/credited to the party, it is inherent provision that one should understood, the Tax component should be excluded Since the Tax component is not forming part of the party's income.

for ex: lets assume, the annual rent is 200000+36000(being GST @ 18%), you have to deduct 20000 being 10% on the basic amount. Further when you file the TDS return, you cannot show amount paid is 236000 and TDS deducted is 20000 which will cause short deduction error.

So, in your case, It is inherent in the said notification that tax component is not the income of the party.
and Further you have to file the return for this 180000+32400 also. but Tax need not to be deducted. you have to enter the "amount paid/credited column" 180000 only, eventhough the amount paid is 180000+32400. and in "TDS deducted" column you should mention "0" and the reason code you have to select for "below Threshold Limit"