applicability of tds

[Asked by Guest]

 Sir ,

                       Our Municipal Corporation is paying an amount of Rs 22000.00 per month for a period of 99 years to Commandant ,APSP II batalian for site allottment for the construction of a over head water tank for public porpose.

                       In this connection, I would like to know whether it attracts income tax under TDS and if so what is the rule position.

urs

chakravarthy s.n.

[CAGOPALJI AGRAWAL]

You have to see whether income of Commandant APSP is exempt  u/s 10 (23AA). If yes, then no tax would be deducted. Normally such armed forces are exempt.

AI Summary

TDS applicability on periodic site-allotment payments is negated if recipient's income is exempt under section 10(23AA).
The payer should determine whether the recipient's receipts fall within the statutory income exemption applicable to armed forces/semi-governmental entities; if that exemption applies, no tax is required to be deducted at source, and in practice such armed forces receipts are often treated as exempt.