TaxTMI 
TaxTMI 
Liability to deduct TDS
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....iability to deduct TDS<br> Query (Issue) Started By: - Priya Indrawani Dated:- 19-4-2025 Last Reply Date:- 19-4-2025 Income Tax<br>Got 2 Replies<br>Income Tax<br>If a person engaged in property management services, is collecting rent on behalf of Resident Owners & after deducting its management charges remitting the balance rent to owner. Whether he can can be held liable for TDS compliance as Re....
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....presentative assessee or trustee of Resident Owner? What will be the tax implications if the owner is Non-Resident ? Reply By YAGAY andSUN: The Reply: This is a nuanced issue under Indian tax law. Let's break it down: Scenario 1: Resident Owner Role of the Property Manager: If the property manager is: * Collecting rent on behalf of resident owners, and * Remitting net rent after dedu....
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....cting their own commission, then they are acting as an agent or representative. TDS Liability: In this scenario, the TDS compliance rests with the actual payer of rent-i.e., the tenant. However: * If the property manager receives rent directly from the tenant, they may be treated as the person responsible for paying under Section 194-I (TDS on rent). * If the manager's own commission/fees ex....
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....ceed Rs.30,000, TDS under Section 194H applies on that amount. Representative Assessee? Under Section 160 of the Income Tax Act, a representative assessee is someone who receives income on behalf of someone else. While this provision can apply, in cases involving residents, the legal obligation to deduct TDS generally stays with the tenant, not the agent, unless there is clear delegation of resp....
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....onsibility. Scenario 2: Non-Resident Owner TDS on Rent Remittance: If the owner is a Non-Resident, then Section 195 is triggered. This section mandates TDS on any sum (including rent) paid to a non-resident, which includes: * Property manager remitting rent to NRI, even after deducting their commission. Hence, the property manager is liable to deduct TDS under Section 195 on the gross rent b....
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....efore remittance to the NRI owner, regardless of who collects the rent initially. Also Note: * Form 15CA/CB filing may be required for outward remittance. * The TDS rate depends on the applicable DTAA (Double Taxation Avoidance Agreement), if any. Summary: Owner Type TDS on Rent TDS on Commission Manager as Representative Assessee? Resident Tenant usually liable under 194-I Yes, under....
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.... 194H (if > Rs.30,000) Possible, but not typically held liable for TDS on rent Non-Resident (NRI) Manager must deduct TDS under 195 Yes, under 194H or 195 Yes - liable under Sections 160 and 195 Reply By Manish Kumar: The Reply: The tenants will deduct TDS on rent in the name of respective owners. If the owner is NRI, then deduction of tax will be as per section 195.<br> Discussion Forum - ....
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