IN MY OPINION IT SHOULD BE CHARGED AS TDS ON RENT U/S 194I

‘Rent’ means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other

agreement or arrangement for the use of (either separately or together) any

(a) land; or

(b) building (including factory building); or

(c) Land appurtenant to a building (including factory building); or

(d) Machinery; or

(e) Plant; or

(f) Equipment; or

(g) Furniture; or

(h) Fittings

Whether or not any of or all of the above are owned by the payee Explanation (i)to Section

194I.Subletting is also covered.

No there is no TDS liability of Contractor because there is not deemed income concept in the hand of contractee. The Conractee adjusting the amount from contract value. If they will not adjust from contract value then contract will liable to duduct tax u/s 194 I.

TDS will be deducted u/s 194 I. if transactions are shown (no matter amount is adjusted or seperately paid.)

Sanjay Singhal 

Yes Tax has to be deducted at Source under section 194I (the adjustment is immaterial)