The Income Tax Appellate Tribunal on Wednesday said that 2% TDS will be deducted on common area maintenance charges. A two-member bench comprising Judicial Member CM Garg and Accountant Member Pradeep Kumar Khedia observed that the charges were not part of the rent paid by the assessee company.
The case of HV Global v. ITO pertains to assessment year 2012-13, wherein the assessee contended that the agreement (to take possession of rental premises) indicated that for ‘payment of rent’ and ‘payment of rent’ There were two separate sections. Common Area Maintenance Fee’. So when it came to TDS, the two could not be clubbed.
The appellant submitted that TDS charges were applicable at the rate of 0.5% instead of 10% as per the certificate issued by the TDS officer. He said that he had made a deduction of 2% which was sufficient to comply with the Act, arguing that no further disallowances or additions could be made.
The Income Tax Tribunal held that maintenance charges should be paid after 2% TDS, when the receivers for rent and other charges are set apart.
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