TDS on Society Maintenance Charges- Applicability and Rules
Society maintenance charges are a regular expense for residents and businesses occupying apartments, housing complexes, and commercial buildings. But when it comes to tax compliance, one common question arises: Is TDS applicable on society maintenance charges? The short answer: Yes, TDS on society maintenance charges is applicable, but only under specific conditions. Let’s break it down.
What are Society Maintenance Charges?
Societies collect monthly or yearly charges for upkeep of the property. These are typically used for:
- Repair and maintenance of building structures
- Security services and housekeeping staff payments
- Common area maintenance (CAM), including lifts, lighting, and gardens
- Sinking fund and repairs fund for major projects
When individuals or companies make such payments, the question of TDS on society maintenance charges of Society applicability comes into play
Also Read: How to reduce society maintenance cost
Applicability of TDS on Maintenance Charges of Society
Under the Income Tax Act, Section 194C, TDS on society maintenance charges may be required if payments are made under a contract for repair, maintenance, or services.
- If an individual resident pays to their housing society, no TDS is required.
- If a company, firm, or tenant pays maintenance to society or commercial complexes, TDS may apply if the limit is crossed.
- Thresholds for applicability:
- ₹30,000 for a single payment
- ₹1,00,000 in aggregate during a financial year
TDS on Society maintenance charges paid to the housing society is generally not applicable for individual residents, but may apply when maintenance or CAM charges are paid by companies, firms, or commercial tenants under Section 194C after crossing the prescribed limits.
Read more on: TDS on Housing Societies
TDS on Maintenance Charges Rates Under Section 194C, Income Tax Act
Following is a tabulated illustration explaining the rate of repairs and maintenance TDS:
| Nature of Payment | TDS Rates with PAN | TDS Rates without PAN (Under Section 206AB) | TDS Rates (14.05.2020 – 31.03.2021) |
| Credited/paid HUF or resident individual | 1% | 20% | 0.75% |
| Credited/paid to any other person | 2% | 20% | 1.5% |
| Credited/paid to transporters | NIL | 20% | NIL |
Please note: TDS will be deducted on its basic rates only. Thus, zero Surcharge, SHEC and Education CESS will add to these rates.
Read more on: Comprehensive Guide on Income Tax Society
TDS on Repair and Maintenance Charges of Society
TDS on Repair and maintenance charges usually go to contractors, plumbers, electricians, painters, or vendors. In these cases, if the limits specified under Section 194C are crossed, TDS needs to be deducted:
- Deduction Rate: 2% (for payments to contractors)
- Party Responsible: The payer (company, business, or tenant)
- Individuals for personal use are not required to deduct TDS
Read Also: Guide to Income Tax for Housing Society
TDS on Common Area Maintenance (CAM) Charges
TDS on CAM charges is applicable in many commercial and residential properties such as malls, IT parks, and large housing complexes. CAM (Common Area Maintenance) charges include expenses for shared facilities like lifts, corridors, lighting, cleaning services, security, and parking areas.
- TDS on CAM charges is treated under Section 194C (contract).
- If the yearly CAM charges paid to a facility provider exceed ₹1,00,000, the payer must deduct TDS.
TDS on Maintenance Charges Limit and Repairs and Maintenance TDS Rate
Here is a quick overview of the repair and maintenance TDS limit, along with the applicable thresholds and rules for TDS on maintenance charges under Section 194C of the Income Tax Act.
The table below explains the repair and maintenance TDS limit, CAM charges limits, and other society maintenance payments, along with the applicable Repairs and Maintenance TDS rates and sections.
| Payment Type | Limit per Transaction | Yearly Limit | TDS Section | TDS Rate |
| Repair & Maintenance | ₹30,000 | ₹1,00,000 | 194C | 2% |
| CAM Charges | ₹30,000 | ₹1,00,000 | 194C | 2% |
| Society Maintenance (Resident) | N/A | N/A | Not Applicable | Nil |
| Society Maintenance (Corporate Tenant) | ₹30,000 | ₹1,00,000 | 194C | 2% |
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TDS Deduction on Society Maintenance Charges: Complete Process
The TDS deduction on society maintenance charges involves a defined process that housing societies and commercial property managers must follow to remain compliant with the Income Tax Act. This process includes deducting TDS at the applicable rate, depositing it within the due date, and filing the required TDS returns
- Deduct TDS at the time of payment/credit (whichever is earlier)
- Deposit the deducted TDS with the government within due dates
- File quarterly TDS returns
- Issue the TDS certificate (Form 16A) to the payee
Time of TDS Deduction on Society Maintenance Charges
If the payment is made by or on behalf of the Government, the time limit for TDS deduction is the same day on which the payment is processed.
If the payment is on behalf of any other entity except the Government, TDS deduction will take place on:
- On or before April 30th if the payment is made in March
- For other months, within 7 days from the end of the month on which payment has been made.
The payable person can deduct TDS:
- At the time of crediting the sum to the payee’s account
- Payment is made in cash
- When an amount is credited to an account, whether it is called a “Suspense account” or by any other name, in the books of the person who has to pay that amount, it is considered as income being credited to the payee’s account. Thus, TDS will be debited if the amount is credited to the account or by any other mode, whichever happens earlier.
Please note: Failing to meet the deadline for TDS deposit under Section 194C could result in severe financial consequences. It may result in accruing interest, facing penalties, and encountering avoidable legal complications.
Read more on: GST on Apartment Maintenance Charges
Conditions to Meet for TDS Deduction on Society Maintenance Charges
The Government must deduct TDS on maintenance payments if:
- If the contractor or subcontractor is a resident under Section 6 of the Income Tax Act, 1961.
- The consideration amount of the agreement concerning which the payment is processed is ₹30,000 or more.
Threshold Limit for TDS Deduction Under Section 194C
The threshold limit for TDS deductions on maintenance charges is:
- ₹30,000 or more for a single payment.
- ₹100,000 or more for the aggregated value during the relevant financial year.
Please note: if a single payment is less than ₹30,000, but the total value reaches ₹100,00, TDS will be deducted.
Exemptions of Income Tax Deduction Under Section 194C
The following cases are the exemptions where zero TDS deduction will be made. Have a look:
Personal Purposes:
If an individual or HUF makes a payment for personal reasons, no TDS should be deducted from that payment.
Non-resident Contractor
Payment to a contractor who is not a resident will not be subject to TDS under section 194C of the Income Tax Act, 1961. Instead, it will be regulated by the provisions of Section 195.
Ten or Less Goods Carriages
When doing business that involves hiring or leasing goods carriages, no TDS deductions can be made from any credited or paid sum. This rule applies if the contractor has 10 or fewer goods carriages at any time during the previous year. Also, if they provide their PAN and a declaration to the person making the payment or crediting the amount.
TDS on Maintenance Charges at a Lower Rate
As per Section 194C, if the assessing officer (AO) is assured that the overall income of the contractor or subcontractor is justified, then they will be eligible for the income tax deduction at any lower rate or no deduction of income tax. Then, the AO can issue the relevant certificate upon request from the contractor or sub-contractor. Subsequently, the contractor or sub-contractor can provide a lower rate or a nil TDS certificate.
Clarifications Made by the Central Bureau of Direct Taxes about TDS on Society Maintenance Charges
Circular No. 1/2012
All deductors must issue a TDS certificate in Form No. 16A by generating it through the TIN central system. They can download the certificate from the TIN website, which will have a unique TDS certificate number. These rules apply to all sums deducted on or after 1.04.2012. A digital signature or a manual signature can authenticate the issued certificate.
Circular No. 23/ 2017
TDS should be deducted from the invoice amount for maintenance charges, excluding the GST amount if it is listed separately on the invoice.
However, if the GST amount is not listed separately on the invoice, TDS should be deducted from the entire invoice amount.
Circular No. 715/1995
The routine and regular maintenance contracts, which also involve supplying spare parts, will fall under Section 194C.
Read more on: GST Invoicing for Housing Society
Issuance of TDS Certificates
Issuance of TDS certificates in Form No.16A for payments other than salary is a must-do every quarter. According to Rule 31, anyone responsible for deducting tax from non-salary payments must issue a Form No. 16A TDS certificate quarterly. The certificate issuance dates are:
| Quarter | Due Date |
| April to June | 15th August |
| July to September | 15th November |
| October to December | 15th February |
| January to March | 15th June |
Consequences for Non-compliance to TDS Under Section 194C
Failure to adhere to Section 194C may lead to outcomes like interest charges, fines, and legal action. Not deducting TDS within the specified timeframe may result in a 1% per month or part thereof interest charge and penalties ranging from Rs. 10,000 to Rs. 1 lakh.
Also Read: GST on Maintenance Charges
How NoBrokerHood Helps in Managing Society Maintenance Charges
NoBrokerHood is a society management system that simplifies housing society management, including maintenance fee collection and communication between residents and management.
| Aspect | How NoBrokerHood Helps |
| Maintenance Fee Collection | Automates society maintenance and CAM charge billing, making collection easy and transparent for residents and tenants. |
| Payment Tracking | Tracks all maintenance payments made by residents and commercial tenants in one centralized system. |
| TDS Applicability Awareness | Helps societies and tenants understand that TDS applicability on maintenance charges remains as per the Income Tax Act. |
| Tracking TDS Limits | Assists corporate tenants and commercial units in monitoring total payments to ensure they stay within TDS threshold limits. |
| CAM Charges Management | Simplifies billing and payment records for CAM charges in malls, IT parks, and large housing complexes. |
| Record-Keeping | Maintains detailed transaction history, making it easier to generate reports required for TDS filing and audits. |
| Compliance Support | Supports documentation and reporting, though the responsibility of TDS deduction remains with the payer. |
| Transparency & Communication | Improves communication between residents, management, and tenants regarding maintenance bills and payments. |
All Solutions by NoBrokerHood:
Final Words
Hopefully, this comprehensive discussion about TDS on society maintenance charges helps meet all your queries. Section 194C of the Income Tax Act deals with the deduction of TDS on the payment of society maintenance charges. As a thumb rule, TDS must be deducted from society maintenance charges when making a payment to a contractor as per a contract. Ensure to be aware of the norms and conditions related to TDS deductions for ultimate convenience and security.
FAQs
Not if you are an individual resident paying for personal housing. Applicable only if a company or tenant pays beyond threshold limits.
Interstate supplies are exempt from TDS deductions because such transactions attract IGST instead of CGST and SGST, and therefore, TDS provisions under GST do not apply to interstate services.
Yes, GST applies to repair and maintenance charges. Such services are treated as taxable supplies under the GST law and generally attract 18% GST when provided by registered service providers to societies or commercial entities.
The calculation of TDS under Section 194C involves multiplying the payment to the contractor by the applicable TDS rate as per the nature of the work and the contractor’s status. The TDS amount must be rounded off to the nearest rupee.
Yes, TDS on repair and maintenance is applicable under Section 194C when payments are made to contractors for services, provided the transaction value or total annual payment crosses the prescribed limits.
TDS deduction on society maintenance charges is required when companies or commercial tenants pay maintenance under a service contract, and the payment exceeds ₹30,000 per transaction or ₹1,00,000 annually.
Yes, TDS on common area maintenance charges applies when common area maintenance services are provided under a contractual arrangement, and the payment exceeds the threshold limits specified under Section 194C.
No, TDS is not applicable on society maintenance charges paid by individual residents, as these payments are treated as member contributions and not contractual service payments.
The repairs and maintenance TDS rate under Section 194C is generally 2% for contractors, and increases to 20% if the service provider fails to furnish a valid PAN.
TDS on maintenance charges paid to the housing society is not applicable for individual residents, but corporate tenants or commercial entities may need to deduct TDS if payments exceed limits under Section 194C.