TDS on rent

prasad (Querist) 05 January 2010 This query is : Resolved
My client (partnership firm)has started its operations as a franchisee from 1st July, 2009 & he operates from a Mall.The rent agreement is in the name of the franchisor & hence rent receipt is in the name of franchisor.My client has not deducted the TDS on rent.Now it has got a PAN & is applying for TAN.
Pls tell me what would be the appropriate course of action.Thanks

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Raj Kumar Makkad (Expert) 05 January 2010
Your client should henceforth start deducting TDS and should get it deposited as per rules.

soumitra basu (Expert) 05 January 2010
Your client should deduct TDS on the entire rent provided the same is in excess of Rs. 1,20,000 in a particular year. Please note non deduction of TDS, if applicable, may attract disallowance under section 40(a)(i)(a). Therefore, TDS should be deducted on the entire rent and deposit the same within the prescribe time.

Kumar Thadhani (Expert) 06 January 2010
Liability of deduction of tax on rent falls on duty or obligation on part of your client if the rent proposes to be paid is more than Rs1.20lkhs in one financial year.