TDS Rent & Maintenance

TDS 5377 views 6 replies

Nitin Jogad

Audit & Assurance

52 Points Joined December 2007

Hi Everyone

I have a question,I am a trainee and i have come across a rent agreement which is as follows :

Rent 1,00,000 pm to the landlord

Maintenance charges : 20000 per quarter to the buliding association

The rent agreement states that the lessee is responsible for the payment of maintenance charges directly to the building association .

so I am struck , on what maintenace amount the tds to be deducted and under wat i.e under 194I or 194C , if under 194I then it doesn't exceed the basic limit of Rs.120000

Pls help me and provide me with the related Income tax circulars , case laws ,or provisions.

Thanks in advance

Warm regards

Nitin

Replies (6)

Amir

Learner

4016 Points Joined December 2009

Deaqr Nitin,

TDS on maintenance charges has to be deducted u/s 194 C in the present case...Simply because:-

1) Receipent is different..(Assoxciation & Landlord)

2) It is a different agreement altogether...

The fact that in the rent agreement it is mentioned that maintenance charges shall be paid by tenant is just for the sake of fixing the liability on the tenant...

CA CS Amit Borade

Chief Accountant

2828 Points Joined December 2007

Since it is directly paid to Building association, so it is not part of rent &therefore 194 C is applicable

Nitin Jogad

Audit & Assurance

52 Points Joined December 2007

I thank you for ur reply it will be of great help , can you do me one more favour can you say me the circular no. or any case or provisions relating to it as I have to provide explnation to my boss.

Amir

Learner

4016 Points Joined December 2009

Dear Nitin,

Dept. doesnot issue circular on every aspect...

These 2 contracts are separate..

U ask a simple thing from ur boss that suppose if tommorow the tenant employed the landlord then TDS on his salary would be deducted as per 192 or 194 I

As said by others, maintenance charges is taxable u/s 194C & not 194I since it does not form part of rental charges & its not paid to the landlord towards rent. Also the payment exceeds Rs. 50,000 p.a, i.e 20000*4. Hence tax must be deducted u/s 194C.