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Author: Yatin Jain
Published On:July 14, 2017

TDS On Rent – Section194 IB w.e.f June 01 2017

 Rate of TDS: 

·         TDS is to be deductible at the rate of 5% of Rent paid or payable

·         If PAN is not available, then 20% of Rent paid or payable

Subject to maximum limit of amount of rent payable for the month of March or last month of tenancy as the case may be

Maximum Limit:

 Payment of rent to a resident for land and building exceeding INR 50,000 per month is liable for tax deduction.

 Payment of rent paid or payable after 1st June 2017 are covered only.

Time of Deduction:

 One time in a year and not in every month

1.   Time of credit of rent to the account of payee for the month of March or the last month of tenancy, if property is vacated during the year as the case may be.

2.   Time of payment of rent to payee for the month of march or the last month of Tenancy , if property is vacated during the year as the case may be.

Persons eligible to deduct TDS under section

  1. Individual and HUF who are not required to get his accounts audited under section 44AB.
  2. Individual and HUF who are required to get his accounts audited under Points (c), (d) or (e) of section 44AB.

Section 44AB for Individuals and HUF falling under above perspective

a

A person carrying on business

Gross Reciepts and Turnover > 1 Crore

b

A person carrying on Proffesion

Gross Reciepts> 25 Lakhs

c

A person covered under section 44AE, 44BB,44BBB

Profits less than the releveant section profits

d

A person covered under section 44ADA

Profits less than the releveant section profits

e

A person covered under section 44AD

Gross Profits < 8% of Total Turnover


TDS return to be filed in case of Form 26QC

No TAN is required to file TDS return

Any sum deducted under section 194-IB shall be paid to the credit of the Central Government within a period of thirty days from the end of the month in which the deduction is made and shall be accompanied by a challan-cum-statement in Form No. 26QC

Example

If payment is made on 03 March 2017 then liability to deposit Form is April 30 2017

Form Issued by Government

Form 16C is to be issued as a TDS certificate to the deductee by deductor within 15 days of filing of Form 26QC.

In above example last date of issuing Form is May 15,2017