TDS applicability - payment to Agri Marketing Boards

[mahavir ostwal]

Dear All,   One of my client has taken premises on rent from Agricultural Marketing Board (AMB), amount of rent exceeds the limit specified for deduction of TDS, hence as per my opinion, TDS has to be deducted.   However the AMB requested to not to deduct the tax as the income of AMB is exempt from tax from A.Y. 2009-2010 onwards U/s. 10 (26AAB). However, I think, there is no nexus between income exempt from tax and applicability of TDS. Also, Sec. 194I has specifically mentioned that TDS provisions are not applicable only if payee is Govt. or local authority referred in Sec. 10(20A) \ 10(20).   Can u throw some light on the issue at earliest. Reply ASAP.   Thax CA. Mahavir Ostwal Nashik 9822271725

[CA Anand Mutha]

As per Circular : No. 735, dated 30-1-1996.

1158. Clarification regarding payment of income by way of interest on securities and rent made to Regimental Funds or Non-public Fund established by Armed Forces of Union for welfare of past and present members of such forces or their dependants, whose income is exempt under section 10(23AA)

1. The issue of deduction of income-tax at source under section 193 and section 194-I of the Income-tax Act from any income received by any person on behalf of any Regimental Fund or Non-public Fund established by the Armed Forces of Union for the welfare of past and present members of such forces or their dependants, has been brought to the notice of the Board. Representations have also been received on behalf of Regimental Funds and Non-public Fund established by the Armed Forces.

2. The matter with regard to regimental fund or non-public fund established by Armed Forces has been examined in the Board. Since the income of these organisations is exempt under section 10(23AA) of the Income-tax Act, it has been decided that no tax may be deducted at source under sections 193 and 194-I from the income of such Funds.

taking the ideology from the above circular it can be concluded that one may not have to deduct TDS in your case.

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[ram daware]

Although the AMB has exempt for tax u/s 10 (26 AAB),u have to deduct tax from rent.
The remedy available with the AMB is to apply with the Income Tax authorities for no deduction certificate.
Unless the AMB provide no deduction certificate to your client ,it is obligatory on the part of your client to deduct tax on rent.
                As the AMB is exempt from tax Income Tax authorities can issue no deduction certificate easily .

Regards

CA R.P.DAWARE
PARTNER
PATIL DAWARE GIRASE PAWAR & ASSOCIATES.

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From: mahavir ostwal <mahavi...@yahoo.co.in>
To: nash...@googlegroups.com
Cc: Aurangabad CA Group <aurang...@yahoogroups.com>; Jalgaon CA Group <jalga...@googlegroups.com>
Sent: Tue, 1 February, 2011 11:23:00 AM
Subject: NashiCAs TDS applicability - payment to Agri Marketing Boards

[CA. Rahul Bajaj]

Dear Mahavir,

In my opinion, TDS has to be deducted since there is no clause / proviso to Sec. 194I excluding APMC from TDS applicability.


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CA. Rahul Bajaj
Partner - M/s. Rahul Bajaj & Co.
Chartered Accountants
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Nr Tupsakhare Lawns, Tidke Colony,
Nasik 422002 MS India
Call @ 91-253-2314120, 9371114120

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On 1 February 2011 11:23, mahavir ostwal <mahavi...@yahoo.co.in> wrote:

[Nitin Dhumal]

Dear Mahavir

 

Obtained a certificate U/s 197 from the AMB for Non deduction/Nil Deduction of TDS.

 

Regards

Nitin S. Dhumal

----- Original Message -----

From: mahavir ostwal

To: nash...@googlegroups.com

Cc: Aurangabad CA Group ; Jalgaon CA Group

Sent: Tuesday, February 01, 2011 11:23 AM

Subject: NashiCAs TDS applicability - payment to Agri Marketing Boards