V. VASUDEVAN (LEGAL COUNSEL) 07 January 2010
a company has a lease agreement with an individual on monthly rental and interest free security deposit. The agreement expired and company has a due of 15 days rent. While requesting for refund of security deposit after adjusting the rental for 15 days, should the company adjust the rental - TDS and remit the TDS to IT Department or not. Would appreciate a reply from a taxation expert.
vasudevan
A V Vishal (Advocate) 08 January 2010
You are correct Mr Vasudevan, the burden of deduction and remittance of TDS lies on the company hence the company must ask the owner to deduct that part of rent receivable by him after deduction of the TDS, once the deposit is received the company must remit the TDS.
Illustratively, if the company for example paid a deposit of 100,000 and is due to the owner a sum of Rs.1000/- being the rent for 15 days then, the TDS on the rent of Rs 1000 @ 10% will be Rs.100/- and the owner need to repay the company an amount of Rs.99,100/- on receipt of the amount the company must remit Rs.100/- as TDS.
V. VASUDEVAN (LEGAL COUNSEL) 08 January 2010
Thank you very much Mr. VIshal, for your instantenous response and clarification.
Regards
Vasudevan
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