TDS on Rent – Section 194-I, Due Dates, Rates, Person who Liable

TDS on Rent: According to section 194 I of Earnings tax act 1961, TDS on lease needs to be subtracted where the aggregate quantity paid or credited or most likely to be paid or credited to the account of individual getting the rent exceeds Rs. 1,80,000 during the financial year. Nevertheless, if you are a joint owner of a property then this limit will apply to every joint owner individually i.e. TDS on lease will be subtracted just when the limit of Rs. 1,80,000 surpassed for each joint owner. Just recently we also supply TDS Rate Chart, and How to Pay TDS Online Full Guide and Treatment. Now you can scroll down below and Examine Complete Details for TDS on Lease

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CHANGE IN AREA 194- IB (TDS ON RENT)

According to section 194- IB any Person or Hindu Undivided Family paying lease of Rs. 50,000 for a month or part of a month during the previous year, is responsible for TDS @ 5% on such earnings.

Due date of Payment

30 days from the end of month in which deduction is made

Form No.

TDS on rent payable to Central Federal government is to be accompanied by a challan cum declaration in Type 26 QC. Certificate of TDS IN Type 16 C is to be sent to payee within 15 days from the due date of providing the challan cum statement.

Interest & Penalty

Interest

• 1% per month interest will be imposed if TDS is not deducted.
• 1.5% monthly interest will be imposed if TDS deducted, however not paid.

Penalty

• Rs. 100 each day will be imposed as charge if return is filed after due date.
• Amount of charge need to not exceed amount of TDS.

Please keep in mind– Note: Tax shall not be subtracted if the aggregate amounts of rent credited or paid during the financial year to the payee does not exceed Rs 1,80,000

Terms to be comprehended:

Lease based on explanation provided by income tax act,1961:

The term Rent implies any payment if ends up being payable under any lease, sub-lease, occupancy or any other arrangement or plan for the use of following things:

Who are the persons liable u/s 194 I:

1. Person other than people & Huf:

Anyone who pay of lease to a resident will be bound to deduct TDS under section 194 I of income tax act, 1961.

2. If the individual is a private or HUF then they need to deduct TDS under this area just if gross invoices or turnover from the business or occupation brought on by him surpasses the limit as prescribed under area 44 AB of earnings tax act 1961 during the last financial year …… #It implies people and Huf those who are not responsible to tax audit u/s 44 AB don’t have any need of ending up being bound by this provision #

Due Date for Issue Quarterly TDS Certificate (Aside From Salary)

Due Date For Filing TDS Return (Online & Offline)

Rate applicable at which tax to be subtracted:

• 1. Lease paid for plant, machinery or devices… TDS @ 2%.
• 2. Lease for land, structure or both … … TDS @ 10%.
• 3. Lease for furniture or fittings… TDS @ 10%.
• 4. The Receiver of Lease shall intimate his PAN Card No. to the Party from whom he is getting the Payment. If the PAN Card No. has actually not been intimated, TDS on Lease shall be responsible to be subtracted @ 20% under Section 206 AA.
• 5. Additional charge is not suitable on TDS on Lease except where payment is made to a foreign company and the quantity surpasses Rs. 1 Crore, the Surcharge imposed there on as per the rates in force.
• 6. No education cess or secondary and College cess is to be in addition charged on TDS on the amount of lease paid.
• 7. If the community taxes, ground lease etc are borne by the tenant, no tax would be subtracted on such quantity.

When TDS can not be made

• Where the payee is the Federal government, local authorities u/s 10(20) and statutory authorities u/s 10(20 A), then TDS can not be made– [Circular No. 699, dated 30-1-1995].
• Where lease is credited or paid to a company trust, being a property financial investment trust, in respect of any realty asset, described in area 10(23 FCA), owned straight by such organization trust

Exemption or relaxation from the arrangement

• When a declaration in Type 15 G (in duplicate) is furnished by the assessee to the payer [Refer section 197A]
• When the recipient uses to the Assessing Officer in Kind 13 and gets a certificate authorising the payer to subtract tax at lower rate or subtract no tax. [Refer section 197]

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