TDS U/S 194 Q ON ELECTRICITY

[CABIJENDERKUMAR BANSAL]

Dear All,

My client company is an owner of factory premises, electricity connection is in the name of owner company.

It has leased the premises to another company who is directly paying the electricity charges to the electricity supplier.

Now, in this case, the turnover of both the companies exceeds ₹ 10 crores during the financial year immediately preceding the financial year.

My query is, who is responsible for TDS deduction on electricity purchase. Tenant company or owner company ?

And, in another case scenario if the owner being an Individual, not having any PGBP Income, but tenant company having PGBP Income with turnover exceeding ₹ 10 crores in every year. In this case, is tenant company, who is directly paying electricity charges, liable to deduct TDS under section 194Q ?

AI Summary

Debate on TDS Deduction Responsibility for Electricity Charges in Leased Factory Premises under Section 194Q A query was raised regarding the responsibility for Tax Deducted at Source (TDS) under Section 194Q on electricity charges when a factory premises owner leases the property to another company. Both companies have turnovers exceeding 10 crores. The question is whether the tenant or the owner should deduct TDS. One response suggested that the owner, whose name is on the electricity bill, should deduct TDS. Another response noted that electricity is considered goods, but the Central Board of Direct Taxes (CBDT) exempts it from Section 194Q unless purchased from private power generators like windmills.