Tds on rent under 194i of i t act

CA Sanjay Baheti (PROPRIETOR) (1155 Points)

14 March 2014  

Dear Experts,

My client being an Individual engaged in manufacturing Activities & also covered under Tax Audit.

My client is paying Factory Rent to individual Landlord @ Rs.10000/- per month till 30.09.2013.Hence No deduction towards TDS on rent @ prescribed rate made till Sept,2013 as monthly rent is less than 15000/-p.m or annually less than Rs.180000/-also.

Now From Oct,2013 & on wards the Monthly Rent stepped up from Rs.10000/- to Rs.25000/-.Therefore now there is need to deduct TDS on rent as per rule i.e. @ 10% on Monthly Rent of Rs.25000/- being Rs.2500/- for every month from Oct,2013 to till March,2014.So total TDS deductions towards rent for F.Y.2013-14 is Rs.15000/- (i.e.2500*6)

However if we consider total rent paid to landlord during F.Y.2013-14 that comes Rs.210000/-(60000+150000)then on annually basis TDS deductions should be made Rs. 21000/- for F.Y.2013-14.

Now query is whether my client has to deduct additional TDS Deduction of Rs.6000/- based on Annual Rent in the month of march,2014 or not. Please reply urgent.