We are marketing service apartments we receive payments from company after deduction of TDS @ 15.45 (TDS on Rent ) and we make the payments to owners after deduction of our commission whether we have to deduct TDS on payments made to owners and TDS made by the companies for our payments is it correct . Ravishankar.B , Banglore
The rent of apartment is covered u/s 194I of the I T Act. In your case , you take the apartment on rent ,make it serviceable and then put on rent to other persons. For this , other persons pay you rent. In other words , you are subletting , off~course , with some enhancement in living condition of the apartment.Therefore, section 194I applies at two stages. Once when you receive the payments and once when you pay the rent to the owners. Remember , if you are individual or HUF , then you are not liable to deduct the tax at source if your sales, gross receipts or turnover of the business or profession exceeds Rs 40 lakhs. Otherwise , you are liable to deduct the tax if the rent(aggregate) exceeds Rs 1.20 Lakhs.
If you want that the TDS provision should not apply at two level, the business has to be re framed in a way that you get the commission and the rent goes directly to the owner. So who ever , takes apartment on rent, it has to be shown that the rental agreement is with the owner and you are only looking after servicing and other aspects for which you are charging commission from the original owner.
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