The question is that is TDS u/s 194-I being applicable on payment made to hotel towards room booking charges.
In this regard, following are the input.
- As per CBDT circular No. 715 dated 8-8-1995 which is master circular on TDS , question No 20 confirms that TDS being applicable on payment made to hotel towards room booking.
- FHRAI ( Hotel Association) filed a writ petition in the Delhi High Court on this matter and obtained a stay or interim order from the Court, dated 12th April, 1999. The stay is still continuing and our members of FHRAI are benefiting from it
- Further, CBDT vide their specific circular No. Circular No.5/2002 F.No. 275/27/2001-IT/(B) dated 30-07-2002 provided further clarification.
- When the hotel is in legal obligation to provide the room under agreement then TDS being applicable
- In other case, TDS not applicable.
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