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TMI BlogTDS applicabilityX X X X Extracts X X X X X X X X Extracts X X X X ..... 27.12.2011 Dear Sir/Madam, I am working as the internal auditor of a company. It is working in a rented premises. We have a rental agreement for the rent. Apart from this, we are required to pay monthly usage charges of Airconditioner, generator (both are common facilities to all tenants) and share of monthly maintenance expenses. These expenses are not included in the rental agreement mention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed earlier. My query is that whether the payment of these expenses attract TDS provisions? Please advice. Expecting a very clear answer. Thanking You, Sincerely, C.A.Hariharan.M.P. - Reply By MOHAN S - The Reply = Mr.Hariharan, Kindly refer to section 194I of Income Tax Act, 1961 .. There the "Rent is defined as 'Any payment made by whatever name called for use of any land, buil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding or land appurtenant to a building , machinery etc.' Thus Tax need to be deucted on the whole amount paid. - Reply By DEV KUMAR KOTHARI - The Reply = Expenses for services and facilities is not rent. It depends to use of electricity, and expenses incurred by the person who carry out upkeep and maintenace of building ( even if by landlord- he does so as a contractor or service provider a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd not as landlord). These payments can best be called payment for carrying out work and liable to TDS u/s 194C . - Reply By MOHAN S - The Reply = Mr.Kothari, If you look at the section 194I it clearly says "ANY PAYMENT made for use of land, Building" etc. So your view that ' Expenses for services and facilities is not rent" is not found support in law. Although I do agree that it would c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reate hardship if any one has to deduct tax on expenses like maintenance. But unless the act is amended or the Central Board of Direct Tax issues a circular mitigating the hardship, assessees need to deduct tax on all payments and not only the rent component. Deaprtment is likely to take penal action if any one fails to deduct tax on the entire amount. - Reply By DEV KUMAR KOTHARI - The Reply = ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Please see words ... any income by way of rent.... in section 194I and Rent means any payment ... for the use of land,... in explanation ... Electricity payment, upkeep and maintenace etc are not for use of land, building... but these are for maintainng building which can be by tenant, landlord or any other agency. These services cannot be let out by way of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lease, sub-lesase, tenacny etc.These services are carried out. Only property can be let out by way of lease, sub-lease, tenancy ... Suppose landlord has agreed to provide cleaning services even inside the property let out. He will charge only when he has carried out cleanign activity and not when he does not clean the space. Suppose office is closed for two months, tenat will have to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent for space but not for cleaning services. - TDS applicability - Query Started By: - HARIHARAN mp Dated:- 27-12-2011 Income Tax - Got 4 Replies - Income Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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