Whether 194i or 194c

Dear all, My client was dealing in procurement of milk. By using the premises of lessor along with machinery, milk procurement will be carried out. For this activity, company needs to pay Rs. 0.35 per ltr of milk processed during the month subject to minimum amount of Rs. 21,000 p.m.

Agreement was available between both the parties & stated that "The lessor desirous of giving on lease to the lessee the said property with all rights, previliges, and advantages whatever nature relating to the demised premises.

Pls clarify me whether it is subject to TDS u/s 194I or 194C.

If it is 194I, then rate applicable @ 2% or 10%.

Pl. clarify me

 

Replies (5)

In case of composite agreement, if the essence of the agreement is taking premises on rent (as evident from the agreement), then 194I is applicable and tax rate would be 10%.

Agree with Ms. Pornima Madhava
Dear S G K BHARADWAJ, Kindly clear whether the lessor has given the machinery and land for use or just the land. Secondly whether there is possible a distinction between rent for machine and land. Also whether the client had to use the place only for milk production or can use it as he likes.

refere to the some of the recent case law, tds would be 2%. refere mother dairy case .pure land and building would atract 10%. composstion with machinery and land and building attact 2%. which you can refer japan airways case law.

194 I--10 %

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