WhetherTDS applicable in case of rent paid in order of court

(1) Rent paid by the lessee is the income of the lessor, irrespective of the fact that such rent is payable under the Order of the court. Hence Sec 194 I will be applicable and TDS has to be deductd on the Rent paid or payable as usual.

(2) The amount of Service Tax on Rent does not constitute the income of the lessor. The lessor is only a Collecting agency who collects Service Tax on behalf of the Govt. and ultimately pays it to the Govt. Hence, when it is not the income of the lessor, there CANNOT be any TDS on Income. So TDS should be deducted ONLY on the amount of Rent WITHOUT considering the amount of Service Tax. Refer the following Circular issued by the Dept.

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