TDS on Payment of Rent, Under section 194I TDS on rent exceeding Rs.2,40,000/- @ 2% in case of plant and machinery and @10% in case of land or building or furniture or fitting is to be deducted by the person paying the rent except for individual/HUF not liable to audit u/s 44AB (total sales, turnover or gross receipts exceeding 1 crore (or 5 crores if aggregate of payments received or made in cash doesn’t exceed 5%) in case of business and gross receipts of more than 50 lacs in case of profession or person carrying on deemed business if they claim their income below the deemed income).
Then what about individuals/HUF who are not liable to audit u/s 44AB and are paying rent?
For them Provisions u/s 194 IB are applicable. Let’s discuss it in detail:
1. Whom is it applicable to?
Individual/HUF who are not liable to audit u/s 44AB.
2. When is it applicable?
When Individual/HUF pay rent which is more than Rs.50,000/- per month.
3. When is it to be deducted?
If the property is to be vacated then it should be paid before the year, otherwise, it will be paid during the last month of the year. It is paid on due or payment whichever is earlier.
4. What is the rate of TDS?
The rate of TDS is 5%. However, if the PAN of the landlord is not available then the rate will be 20%.
5. How is it to be paid?
Form 26QC which is a challan cum statement is used to pay this. TAN number is not necessary for this.
6. What is the method of payment?
Click https://www.tin-nsdl.
7. Other important points:
This TDS is to be deducted and paid only once during the year.
There is no requirement of filling any TDS return quarterly for it.
Regards,
CA Anurag
(Note: The writer can be reached through Twitter handle: @caanuragwriter)