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TDS QUERY

Nikhil (CA FINAL CLEARED GRP 1) (86 Points)

08 January 2009

IF CO. 'X' MADE TO PAYMENT TO CO. 'Y' AS RENT BUT THEY HAVE TWO AGREEMENT AND VALUE OF EACH AGREEMENT IS RS.7,000/- PER MONTH i.e. RS.84,000/- OF ONE AGREEMENT AND OTHER ALSO HAVE SAME VALUE AS ABOVE .IN THIS CASE CO.'X' MADE PAYMENT TO CO. 'Y' TOTAL RS.168,000/-

SO MY QUESTION IS WETHER CO 'X' DED^ TDS ON AMT PAID TO CO. 'Y'?

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5 Replies

yogesh dave (service) (376 Points)
Replied 08 January 2009

payment of rent is made to one party which exceeds the prescribed limit hence tax should be deducted, whether agrements are made for any numbers.

Preetham S L (CA Final Student) (94 Points)
Replied 09 January 2009

Hi Nikhil,

Since the amount has exceeded the limits specified under the act, i.e. 1,20,000 p.a. TDS on pmt has to be made.

CA CS CIMA Prakash Somani (Landmark Group) (23502 Points)
Replied 09 January 2009

Yes TDS must be deducted. Its is nothing but evasion of tax and in income tax "you can not to anything indirectly which you can not do directly".

Koneri Balaji (CHARTERED ACCOUNTANT) (120 Points)
Replied 09 January 2009

As under Sec 194 I uses the word payee, number of agreements or separate agreements will not come into picture and in your case TDS will be applicable.