A PARTNERSHIP FIRM IS PAYING RENT OF RS 2LAC PER MONTH TO A INDIVIDUAL FOR USING HIS PREMISES FOR RESTAURANT PURPOSE... THE OWNER IS CHARGING SERVICE TAX ON SUCH RENT BUT ASKING THE FIRM(TENANT) NOT TO DEDUCT TDS..
SO KINDLY TELL ME WHAT SHOULD THE FIRM DO?
SHOULD THE FIRM CONTINUE PAYING THE RENT INCOME WITHOUT DEDUCTING TDS?? OR WHAT THE FIRM SHOULD DO?
Dear Ajit
As per Circular No.4/2008 Dated 28.04.2008 (as also Circular No. 1/2014 [F.NO.275/59/2012-IT(B)], DATED 13-1-2014), Tax is to be deducted from rent after excluding the service tax component if it is shown in the bill seperately. That is, there is no TDS on service tax component as long as it is seperately mentioned in the bill.
Thus, there is relief only in respect of the service tax component. Otherwise, there is no change in the provisions of Sec.194-I. So, if the yearly rent payments exceed Rs.1,80,000, TDS still needs to be made on such payments.
It is possible that the individual landlord may have read the new (or old circular) and is under the wrong impression that whenever service tax is mentioned seperately in the bill, there is no need to make TDS by the payer.
Regards
Ajay*
correctly notified by Ajay ... you can even find the same in amendment book of VG module for may 14 at page 106 ...
BHUPINDER SHAH AND COMPANY
New Delhi
CA Inter
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Triveni Turbine Limited
Bengaluru
CA
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CAclubindia
