TDS on Rent u/s 194I of Income Tax Act

TDS 6641 views 8 replies

Manish

salaried employee

137 Points Joined August 2008

Hi,

I have one query related to TDS on Rent u/s 194I of Income Tax Act.

In order to solve this query i am trying to present the complete scenario of the case which is mentioned here under.

We ( Limited Company)have two agreement with party one for godown space and another for Office space.

Now as per the agreement/contract the rent for office space is Rs 13500/- per month, and the rent is to be paid by a Limited company via cheque or DD in the names of A and B equally.

A Rs 6750/-

B Rs 6750/-

And another agreement is for Godown space on monthly rental of Rs 21000/- and the rent is being paid by Limited Company in the names as stated below:

A for Godown rent Rs 7000/-

B for Security Rs 7000/-

C for Maintenance Rs 7000/-

Query: Though in this case the agreement is made separtely for two separate premises ie. Godown and Office, but the owners are the same (A & B) so shall we deduct TDS because when we add the rent for both the premises for A and B than we found that it exceeds the limit ie. (Rs 7000+Rs 6750= Rs 13750 Per month ) in both the cases.

Kindly suggest and clarify the above case with sections and rules.

Replies (8)

praveen

Chartered Accountant

6971 Points Joined September 2007

You are right u have to deduct tax on Rs.13750 as it is rent and paid to same person by your company.

CA. Yogesh Malpani

Chartered Accountant

216 Points Joined October 2008

As per Sec 194I and judicial interpretations u have to see the the portion paid to each joint owners. if the payment to a joint owner does not exceeds 120000 indivisually then NO TDS should be deducted. further income tax act does not say anything about the no of property let out by the joint owners. thats definetly means the no of property does not matter what matters is indivisual payment to joint owner should not exceeds 120000 with taking account all the joint property.

number of agreement is mere for judicial purpose and has no relevance with income tax act.

so in this case the amount paid to A and B should be liable to TDS however C will not be liable to TDS

kumar

student

138 Points Joined October 2008

yes as yogesh malpani refferd the provision you need to deduct the TDS for both A and B if the are indiviuals @ 15.45% since total rent payment does not exceed 10 lakhs

kumar

student

138 Points Joined October 2008

yes as yogesh malpani refferd the provision you need to deduct the TDS for both A and B if the are indiviuals @ 15.45% since total rent payment does not exceed 10 lakhs

Manish

salaried employee

137 Points Joined August 2008

Dear All,

Thanx for the reply. I want to know that if both the premises i.e. Godown and office are located in two different cities and the company who is paying the amount of rent is same for both the premises and the landlord is same than whether the company shall deduct TDS on rent.

CA. Yogesh Malpani

Chartered Accountant

216 Points Joined October 2008

yes u have to see the person i.e owner not that property is in two cities or other conditions i.e. agreement. Even if 1 property is in foreign country then also it will be taxable as i mentioned for both

Mukesh Bansal

Audit Manager

30 Points Joined November 2008

As per section 194 & circular 715 Tax deduction does not depend upon nomenclature.. Tax has to be deducted from rent paid by whatever name called

Guest

440105 Points Joined August 2012

sir,

we have joint proprety in the name two director & we have rented it. now here we want to know how much TDS will be chared to both of us & what will be indivisual also ?

please clear the matter also ?

thanks

kaustubh