TDS on Rent

only when its turnover exceeds Rs40lacs/10lac as the case may be

TDS on Rent applicable when amount exceed 120000 in a year. in your case in first year for 4 month and second year for 6 month. if its not continue then TDs not applicable.

TDS is not applicable as the Rent have been paid for two different financial year

only when its turnover exceeds Rs. 40 lacs/Rs. 10 lacs (cases covered u/s 44AB) IN PRECEDING YEAR.

there is tds provision not applicable, because tds provision is applicable when u paid rent rs. 120000 in a financial year, here u not made such payment so u have no need of tds deduct

Hi Shamita,

TDS provisions aren't applicable in aboce mentioned case.

Frndz, i thnk the condition of turnover 40lacs/ 10lacs and payment of Rs. 1,20,000 is cumulatively to be met.

Wht is your opinion??

First of all it has to be decided whether the person who is paying rent is liable to deduct tax at source. As in the given case, the payer is a proprietor, he shall be liable only if in the preceding previous year his turnover from business has exceeded Rs. 40 lakh or from profession has exceeded Rs. 10 lakh. If the answer is yes, he has exceeded the threshold limits, then he is liable to deduct tax other wise not.

Once the liability is decided, it has to be checked whether the payment attracts TDS provisions. Sec 194 I specifies that where the rent payment exceeds Rs. 120000 in a financial year then tax has to be deducted. But in this case as the payments are spread over two financial years and in neither year do they exceed 120000 in gross, tax has not to be deducted.

Further if the contract is renewed in the year 2010, and the gross rent to the same payee exceeds Rs. 120000 in the financial year 2010-2011, tax shall have to be deducted.

(in the question it is written that the contract is for 11 months, but the actual period mentioned is only of 10 months. I think its a mistake by the author of this thread)

 Agree with' Amol Gopal Kabra'

yes, I agreed with Amol Gopal Kabra.

                                        OM SAI SRI SAI JAI JAI SAI

Mr. Dintakurthi, please take care while writing the name of any person in the club. My surname is 'Kabra' and not 'Kebra'.

Thank you very much..

Agree with Amol Gopal Kabra...

Sorry sir for wrong typing of u r name Mr.Amol Gopal Kabra please forget my mistake. NOw i modified that mistake
 

                                                              Thankyou sir,

                                         OM SAI SRI SAI JAI JAI SAI

Its ok.. Mr. not a problem.. no need to remember any mistake. and fortunately CA Club Inida has given us the facility to rectify our mistakes.. :-)