TDS on Banquet Hall with Food: Complete Guide for Event Planners: Fast-Track Guide to Understanding TDS on Banquet Hall Bookings with Food

Tax Deducted at Source (TDS) on banquet hall rentals with catering services is a crucial compliance aspect event planners in India must understand. When you book a banquet hall and food together, you’re typically engaging both a rental service and a catering contract, each with its own applicable TDS provisions under the Income Tax Act. For planners, ignoring the correct TDS treatment could result in penalties or loss of input credit for tax deducted. Here’s a full guide on how TDS applies when you book a banquet hall along with food services for events.

1. Understanding Banquet Hall & Food Billing Structure

Banquet halls commonly raise a single invoice including both space rental and food/catering charges, or they might provide separate invoices. The division matters for TDS determination. If services are bundled, it’s important to bifurcate rental and catering amounts in your records.

2. Applicable TDS Sections

- Section 194-I (Rent): If the amount paid for the premises exceeds ₹2,40,000 in a financial year, TDS is applicable at 10% on the rent portion (for individual/HUF landlords, at present rates).

- Section 194C (Contractor): TDS at 2% (for entities other than individuals/HUFs) or 1% (for individuals/HUFs if subject to tax audit) applies on the catering/food/service portion if the total exceeds ₹30,000 per contract or ₹1,00,000 in aggregate per annum.

3. How to Deduct TDS Correctly

- Separate Charges: Deduct TDS at 10% on hall rent under 194-I and 2%/1% on catering under 194C.

- Lumped Charges: If the invoice doesn’t separate rent and food, authorities may treat the whole amount as “work contract,” falling under Section 194C.

- GST Consideration: TDS is applied on the base amount excluding GST (unless it’s included in the gross contract value).

4. Payment to Individuals/Companies

TDS rules apply regardless of whether the hall and catering is owned by a company, partnership, or individual, as long as payment thresholds are crossed.

5. Compliance Steps

- Always obtain PAN details from the service provider.

- Pay the correct TDS to government before the 7th of the next month.

- Issue TDS certificate (Form 16A) to the provider.

- File quarterly TDS returns (Form 26Q), mentioning the correct section.

As an interior designer, I often help clients with event space layouts. In such cases, choosing a venue with clear rental and service breakups not only simplifies compliance but gives flexibility in banquet hall layout planning, ensuring your event vision translates smoothly from blueprint to banquet night. Attention to layout and compliance together grants a seamless, worry-free experience.

Tips 1:

To avoid TDS disputes, always ask the banquet manager for separate line items for hall rental and catering, and keep documented communication for records.

FAQ

Q: Is TDS required if the banquet hall owner includes both food and rent in one bill?

A: Yes, but the section depends on the contract. If rent and food are inseparable, the entire payment may fall under Section 194C (work contract). If they are separable, apply 194-I to rent and 194C to catering.

Q: What if my total payment to one banquet vendor is less than ₹2,40,000 in a year?

A: Then TDS under section 194-I (rent) is not required. For catering (194C), the threshold is ₹30,000 per contract or ₹1,00,000 annually.

Q: Who deducts TDS, me (the client) or the banquet hall owner?

A: The person or entity making the payment (client/event planner or company) is responsible for deducting and depositing TDS, provided they’re covered by tax audit requirements or making business payments.

Q: Is TDS applicable to individuals booking for personal functions like weddings?

A: No TDS if you’re booking for a purely personal event and your payments are outside the purview of business/profession. If you’re a business entity, TDS rules apply even for social functions.

Q: How do I bifurcate rent and catering if the banquet hall refuses to separate them?

A: Clarify requirements in writing. If the provider still refuses, deduct TDS as per section 194C on the gross amount, but maintain documentary evidence for your decision in case of assessment queries.