Corporate Tax

Name: Faiz Memon Submitted to: Bela Mam Activity-I TDS applicable to Ledger TY BBA Navrachana University

ABC Company Pvt. Ltd. Mrs Sharmila Shah Anand

1-Apr-2012 to 31-Mar-2013 Date Particulars Vch Type Vch No. Debit Credit 10/9/2012 Dr Rent Expense Journal 6 15000.00 Being rent for the period August,2012 to October,2012 (25000*3) 10/9/2012 Dr RENT Deposit Journal 7 60000.00 Being deposit for rent of 4 months @ 25000 i.e Rs.100000 which is refundable on termination Of rent agreement; interest free deposit 10/19/2012 Cr HSBC Bank Payment 2 15000.00 10/19/2012 Cr HSBC Bank Payment 3 60000.00 Being rent deposit of 4 months paid 11/1/2012 Dr Rent Expense Journal 14 15000.00 11/18/2012 Cr HSBC Bank Payment 41 15000.00 12/1/2012 Dr Rent Expense 19 15000.00 Being rent for the month of December,2012 12/6/2012 Cr HSBC Bank Payment 62 15000.00 1/1/2013 Dr Rent Expense Journal 29 15000.00 Being rent booked for the month of January,2013 1/10/2013 Cr HSBC Bank Payment 99 15000.00 2/2/2013 Cr Rent Expense Journal 37 15000.00 Being rent booked for the month of February,2013 2/1/2013 Dr Rent Expense Journal 43 15000.00 Being rent booked for the month of March,2013 2/5/2013 Cr HSBC Bank Payment 123 15000.00 Being Rent paid for the month of March 2013 135000 150000 Cr Closing 15000 Balance 150000 150000

Here, TDS is not applicable on expense as the amount of payment of rent during the financial year is less than Rs.1,80,000 which is a provision of Sec. 194-I of the Income Tax Act,1961. The provisions are shown on the next page.

When and How tax is deductible from rent: [Sec. 194-I]

The provisions of this section are as under-

Who is the taxpayer

Any person paying Rent ( not being an individual or a Hindu Undivided Family whose books of accounts are not required to be audited u/s 44AB) A resident person Rent of land, building, plant, machinery or furniture At the time of payment or at the time of credit, whichever is earlier. If the amount of payment during a financial year is Rs.1,80,000 or less than Rs.1,80,000

Who is the recipient Payment covered At what time tax has to be deducted at source Maximum amount which can be paid without Tax Deduction

Rent of plant & machinery: 2% Rate of tax deducted at source Rent of land, building or furniture: 10%, tax is deductible on payment/credit.

Is it possible to get the payment without tax deduction or with lower tax deduction

The recipient can make an application in Form No.13 to the Assessing Officer to get a certificate of lower tax deduction or no tax deduction.