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Section 194IB - TDS on payment of rent by certain individuals or Hindu undivided family - Income Tax - Ready Reckoner - Income TaxExtract Section 194IB - TDS on payment of rent by certain individuals or Hindu undivided family (1) Any person, being an individual or a Hindu undivided family (other than those referred to in the second proviso to section 194-I ), responsible for paying to a resident any income by way of rent exceeding 50,000 rupees for a month or part of a month during the previous year, shall deduct an amount equal to 5%. of such income as income-tax thereon. (2) Time of deduction of tax at source: The income tax referred in sub section (1), shall be deducted on such income- at the time of credit of such rent, for last month of PY or the last month of tenancy, if the property is vacated during the year, as the case may be, to the account of the payee or at the time of payment in cash or cheque or by any other mode (3) The provisions of section 203A (requirement for obtaining TAN) shall not apply to a person required to deduct tax in accordance with the provisions of this section. (4) In a case where the tax is required to be deducted as per the provisions of section 206AA , (i.e PAN is not provided by the recipient of the rent) such deduction shall not exceed the amount of rent payable for the last month of the previous year or the last month of the tenancy, as the case may be. (5) No requirement for deducting tax, if rent does not exceeds Rs. 50,000 or Individual or HUF covered u/s 194-I . Explanation .-For the purposes of this section, rent means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of any land or building or both. Example:- Mr. X a salaried Individual, pays rent of ₹ 55,000 per month to Mr. y from June 2023 to Dec. 2023. Is he required to deduct TDS? If he is vacated the premises in December 2023, then tax of ₹ 19,250 [ ₹ 55,000 x 5% x 7 Months ] has to be deducted TDS from rent payable for December 2023. If he is not vacated the premises in that case in the march 2024, then tax of ₹ 27,500 [ ₹ 55,000 x 5% x 10 Months ] has to be deducted TDS from rent payable for March 2024. If PAN does not furnished or not linked with the Aadhar then TDS would be deducted @20%.
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