TDS on Non Refundable Security Deposit

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  1. kumar1947

    kumar1947 New Member

    I HAD RENT OUT A COMMERCIAL PROPERTY ON RENT TO A BANK. LEASE AGREEMENT READ AS

    "TENANT SHALL PAY RS 1200000 RS TWELVE LAC EQUILENT TO 6 MONTH RENT BY WAY OF DEPOSIT (INTEREST FREE).THE AMOUNT WILL BE APPROPRIATRD/DEDUCTED FROM THE RENT PAID DURING LAST MONTHS OF TENANCY"
    AGREEMENT IS FOR 12 YEARS. BANK HAD DEDUCTED TDS ON THIS AMOUNT.WEATHER BANK IS RIGHT TO DEDUCT THE [email protected]%. iN MY OPINION TDS WILL BE DEDUCTED FROM THE INCOME FOR THE CURRENT FINANCIAL YEAR. AS THIS AMOUNT IS DEPOSIT IN NATURE AND WILL BECOME INCOME AFTER 11 AND HALF YEARS WHEN IT WILL BECOME RENTAL INCOME.PLEASE ADVISE.
     
  2. rudrabose

    rudrabose Active Member

    If it was a refundable security deposit - then TDS would not be deducted.

    If it is a non-refundable security deposit - TDS would be deducted on the security deposit
     
  3. rudrabose

    rudrabose Active Member

    Logically speaking - in the above mentioned case - if the tenant does not deduct any TDS and you adjust this amount against the rent - so the security deposit ultimately becomes the rent on which TDS has not been deducted.

    Therefore, TDS on non-refundable security deposit is justified as this is your income
     
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