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March 22nd, 2017, 04:08 PM
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Join Date: Mar 2012
TDS On Rent Paid To Municipal Corporation

Hii sir, I Wants to know Whether the tax is to be deducted at source if the rentals include Municipal tax, ground rent, etc.?

As you Asking for the Tax Deduction If the rentals include Municipal tax, ground rent, etc Let me tell you that On the basis of tax deduction at source under Sec. 194-I is ―income by way of rent‖. Rent has been defined, in the Explanation (i) to Sec. 194-I, to mean any payment under any lease, tenancy, agreement, etc., for use of any land or building

. Thus, if the Municipal taxes, ground rent, etc., are borne by the tenant, no tax will be deducted on such sum.


According to the Advance Learning on TDS under section 194-I and 194-C

The person (not being an Individual or HUF) who is responsible for paying any income to resident by way of rent is liable to deduct tax at source in case the
aggregate of the amount of such income credited or paid or likely to be credited or paid during the financial year by the aforesaid person to the account of, or to payee exceeds Rs. 1,80,000/-. Individuals and /or HUFs who are subject to tax audit are also under an obligation to deduct the tax at source.

The limit of Rs. 1,20,000/- was enhanced to Rs. 1,80,000/- w.e.f. 1.7.2010.


Application of Sec. 194-I
The Finance Act, 1994 inserted the Sec. 194-I, regarding deduction of tax from paymentof rent. The Government felt that an item of income which needs to be covered within thes cope of deduction of income-tax at source is the income by way of rent. In a number of countries also such income is subject to deduction of income-tax at source.

For more information you may Consider the below Attachment

Advance Learning on TDS under section 194-I and 194-C




Last edited by Neelurk; March 21st, 2020 at 02:13 PM.
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