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Tds on rent paid to university

CA Shruti Gupta (CMA FINAL CS Final) (1434 Points)

09 April 2015

Dear Members

Please make me clear that , payment made to university (Kanpur & Lucknow University) as rent of premises , will covered under tds ??

should bank , tanent , deduct tds on such payment ..

(as per section 10 of income tax act ,income of university is exempt for tax purpose)

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6 Replies

J. K. Ratan (Compliance Advisor) (794 Points)
Replied 09 April 2015

Dear Ma'am

Case -1 " University is registered as Society/Trust" If university is registerd entity and hold a PAN no. from income tax Department

(i) If payment made by body corporate (company/LLP) to an university require to deduct TDS under section 194I

(ii) if payment made by an individual not require to deduct TDS (subject to condition under section 44AB of income tax act 1961).

Note:- If Individual is liable to Tax audit under section 44AB of income tax act 1961 require to deduct TDS on above mentioned amount.

PRADEEP S (Finance Manager(B.Com. M.Com. M.Phil. LLB. MA. MBA. MFT. MCS. CA Inter CMA Inter)) (216 Points)
Replied 09 April 2015

Hi Shruthi,

Law does not specifically exempts University for deducting TDS when the University is the receipient. So it is better to deduct tax. But please be ready for refund payment, University will not agree for TDS, due to their increased administrative work, they will ensure that they are paid fully !!! I have experience in past while deducting TDS to IIT.

Regards

Pradeep S

Rajesh Kumar Gupta (Senior Divisional Manager) (714 Points)
Replied 09 April 2015

Better to deduct. How the things have been done in past. Do accordingly.

Ashok J (CA Final) (880 Points)
Replied 09 April 2015

Hi.

Just because the university income is exempted u/s 10, there is no exemption to the payer of rent from from deducting TDS. Further, university can make an application under 197 for nil deduction of tax....

laxmipriya patra (article) (21 Points)
Replied 09 April 2015

tds is not deducted only if the payee is government ,local authorities and statutory authorities refrd to in sec 10 (20A)/10 (20) .If the university is not covered under the above condition then u have to deduct tax on rent u/s 194 I