TDS on rent 194-i not including service tax

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 A long awaited clarification regarding tds on payment of service tax on rent u/s 194-I has been Issued by the CBDT. Details about the issue is given here under:

Brief about section 194-I

  • Rent is to be deducted by all person on payment of rent except huf and individual who’s sales is less than limit specified in section 44AB(tax audit)(40 lacs for business 10 lac for professionals)
  • Rent means any payment Section is applicable even in case of payee is owner or not.
    • (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,
  • Rate of tds is(upto payment made on 30.09.2009)
    • For use of any machinery or plant or equipment:10%
    • For other assets :in case of
      • Payee is Individual or Huf:15%
      • Other case:20%
  • Rate of tds is( payment made on or after 01/10/2009 as per Budget 2009)
      • For use of any machinery or plant or equipment:2%
      • For other assets :10%
      • No need to add surcharge and Cess for resident deductee

The rate of TDS wil be 20 per cent in all cases, if PAN is not quoted by the deductee w.e.f. 1.04.2010.

  • Tax is deductible only if amount of rent paid is more than 120000.

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