TaxTMI 
TaxTMI 
TaxTMI 
Rent Income
Dharmender Batra
The agreement was earlier that the lessee shall pay rent plus service tax. Service tax has been deposited by landlord. Now the lessee says that he will pay only rent and the service tax shall be borne by the landlord. For the purpose of rent income, the rent income will be rent received by landlord minus the service tax deposited by him or the gross rent received.
Tenant Must Deduct TDS on Total Rent Plus Service Tax, Per Income Tax Section 194I and 2008 Circular Guidance. A discussion in a forum addresses a rent agreement issue where initially, the lessee agreed to pay rent plus service tax, but later insisted on paying only rent, leaving the landlord to cover the service tax. The reply suggests that according to Income Tax regulations, specifically section 194I and a 2008 circular, the tenant should deduct TDS on the entire amount paid if the service tax component is known. If rent includes service tax, the landlord should issue a bill showing rent and service tax separately to facilitate proper TDS deduction. The service tax calculation method is also briefly explained. (AI Summary)