tds on rent 194 IB
Rajkiran Ghosh (480 Points)
03 June 2018
sir under section 194 IB the tds for rent will be deducted annually???plz reply me.
15 Replies
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(177801 Points)
Replied 03 June 2018
As per Finance Act, 2017, “TDS on Rent” under section 194-IB is liable to be deducted by Individuals or HUFs (Hindu Undivided Family) (other than an individual or a HUF, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such income by way of rent is credited or paid) responsible for paying to a resident monthly rent exceeding ₹ 50,000. Section 194-IB of the Income Tax Act, 1961 states that for all the transactions with effect from June 1, 2017, tax @ 5% should be deducted by the Tenant/ Lessee/ Payer of the property at the time of making payment of rent (to Landlord / Lessor/ Payee). Tax so deducted should be deposited to the Government Account through any of the authorized bank branches.
Detailed procedure, list of Bank branches authorized to accept TDS and Frequently Asked Questions (FAQs) are available on this website for reference.
Points to be remembered by the Tenant of the Property:
- All individuals or HUFs (except those liable to audit under clause a and b of section 44AB) paying monthly rent to a resident in excess of Rs. 50,000 are liable to deduct TDS under section 194-IB
- Deduct tax @ 5 % from the rent payment made to the Landlord.
- Collect the Permanent Account Number (PAN) of the Landlord and verify the same with the Original PAN card.
- PAN of the Landlord as well as Tenant should be mandatorily furnished in the online Form for furnishing information regarding the rent.
- Do not commit any error in quoting the PAN or other details in the online Form. For the purpose of error rectification you have to contact Income Tax Department.
- Download and furnish TDS certificate in Form 16C from TRACES and issue to the Landlord / Lessor/ Payee within 15 days from the due date of furnishing of the challan-cum-statement in Form 26QC.
- If the Landlord / Lessor/ Payee is a non-resident, liability to deduct TDS arises under section 195 of the Income-tax Act, 1961
Points to be remembered by the Landlord of the Property:
- Provide your PAN to the Tenant for furnishing information regarding TDS to the Income Tax Department.
- Verify deposit of taxes deducted by the Tenant in your Form 26AS Annual Tax Statement.
- Insist on obtaining Form 16C from the tenant which has been downloaded from TRACES website only.
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(177801 Points)
Replied 03 June 2018
As per section 194-IB of the Income-tax Act, effective from the 1st day of June, 2017, namely:—
'194-IB. 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 fifty thousand rupees for a month or part of a month during the previous year, shall deduct an amount equal to five per cent of such income as income-tax thereon.
(2) The income-tax referred to in sub-section (1) shall be deducted on such income at the time of credit of rent, for the last month of the previous year 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 thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier.
(3) The provisions of section 203A 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, 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.
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.'.
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(177801 Points)
Replied 03 June 2018
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(177801 Points)
Replied 03 June 2018
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(177801 Points)
Replied 03 June 2018
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(177801 Points)
Replied 03 June 2018
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(177801 Points)
Replied 03 June 2018
Who is responsible to deduct the TDS on Rent of Property u/s 194-IB?
The tenant of the property being an individual or a HUF (not liable to audit u/s 44AB) would have to deduct the TDS and deposit the same in Government treasury.
I am Tenant, do I require to procure TAN to report the TDS on rent of Property?
Tenant or Payer of the rent on property is not required to procure Tax Deduction Account Number (TAN). The Tenant is required to quote his or her PAN and PAN of the landlord.
How can I use this facility to pay TDS on rent of Property?
The Tenant of the property (deductor of tax) has to furnish information regarding the transaction, online on the TIN website i.e. www.tin-nsdl.com. After successfully providing details of transaction, deductor/tenant can:
- Either make the payment online (through e-tax payment option) immediately; Or
- Make the payment subsequently through e-tax payment option (net-banking account) or by visiting any of the authorized Bank branches. However, such bank branches will make e-payment without digitization of any challan. The bank will get the challan details from the online form filled on TIN website(www.tin-nsdl.com)
If I encounter any error on NSDL e-Gov website while entering the online form details what should I do?
If any problem is encountered at the NSDL e-Gov website while entering details in the online form, then contact the TIN Call Center at 020 – 27218080 or write to tininfo @ nsdl.co.in (Please indicate the subject of the mail as Online Payment of Direct Tax_ TDS on rent of property).
What is Form 26QC?
Form 26QC is the challan-cum-statement for reporting the transactions liable to TDS on rent under section 194-IB of the Income-tax Act, 1961. It is an online form available on the TIN website.
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(177801 Points)
Replied 03 June 2018
What is the due date of payment of TDS deducted on payment of rent u/s 194-IB?
The due date of payment of TDS on rent is thirty days from the end of the month in which the deduction is made.
Example: If a taxpayer has made payment of rent in the month of December, then corresponding TDS should be deposited on or before thirty days i.e. January 30th.
What is the periodicity of filling Form 26QC?
According to rule, Taxpayer/Tenant should furnish challan-cum-statement in Form 26QC in following scenarios:-
- At the end of the FY or in the month when the premise is vacated / termination of agreement. However, taxpayer has to mandatorily file the Form at the end of each Financial Year (in case the agreement period contains more than one FY and rent has been paid/credited during the year)
- In the month when the premise is vacated/ termination of agreement ( in case the agreement period falls in the same FY)
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(177801 Points)
Replied 03 June 2018
From where will I get the Form 16C?
Form 16C will be available for download from the website of Centralized Processing Cell of TDS (CPC TDS), www.tdscpc.gov.in
Can I make Cash/ Cheque payments for the TDS at Banks?
Tenant may approach any of the authorized Bank Branch to facilitate in making e-payment.
I am a Tenant and I have filed Form 26QC before TDS payment and I have selected the option e-payment at subsequent date then how the payment made thereafter within the permissible period would be matched in the 26QC?
E-payment of taxes at subsequent date will be linked to the FORM 26QC based on Acknowledgement number, can be generated at the time of filing of Form 26QC.
How will transactions of joint parties (more than one tenant/landlord) be filed in Form 26QC?
Online challan-cum-statement in Form 26QC is to be filed by each tenant for unique tenant-landlord combination for respective share. E.g. in case of one tenant and two landlords, two forms have to be filed in and for two tenants and two landlords, four forms have to be filed for respective rent shares.
How to make tax payment towards Fee in Form 26QC?
Provision to enter Tax amount (comprising of basic tax, interest and fee) in Form 26QC is given in TIN website and Bank’s site.
What is Fee in Form 26QC and when is it applicable?
As per section 234E of the Income-tax Act, 1961 read with Rule 31A (4B) of Income-tax Rules, 1962, failure on part of deductor (tenant/lesse/payer) to furnish challan-cum-statement in Form No. 26QC electronically within 30 days from the end of the month in which the tax deduction is made will attract levy of fee for default in furnishing statement at the rate of Rs. 200 for every day to be paid by the deductor (tenant/lessee/payer).
What is the procedure for furnishing TDS through the e-tax payment option immediately after providing the transaction details?
E-Payment facilitates payment of taxes online by taxpayers. To avail this facility the taxpayer is required to have a net-banking account with any of the Authorized Banks or a debit card in case of some banks.
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(177801 Points)
Replied 03 June 2018
Rajkiran Ghosh
(480 Points)
Replied 03 June 2018
sir i got your point one thing clear me if i pay rent on the month for march 2018 in f.y. 2017-18 and the rest months are vacated....and i pay rent of rs 60000 in the month march 2018.... so will i deduct tax on rs 60000 in f.y. 2017-18????
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(177801 Points)
Replied 03 June 2018
Effective from 1st June 2017, individuals & HUF not covered under tax audit would be subjected to deduct tax at source for rent payments if it is Rs. 50,000 or more per month.
Salient features:
- Applicable only to individuals & HUF who are not under tax audit (under section 44AB)
- This section is applicable from 1st June 2017
- Tax Account Number (TAN) not required for the deductor
- Applicable to monthly Rent of Rs. 50,000/- or above
- TDS @ 5% if rent receiver is holding PAN, or otherwise TDS would be @ 20%
- Deduction of Tax is to done in the last month of previous year (i.e. March) or in the month when the premises is vacated
- Deposit to be made within 30 days from the end of month when tax was deducted. As an illustration, if deduction was in March, it should be deposited by 30th April or if deduction was in December, it should be deposited by 30th January.
- The deducted tax is to be deposited in the newly introduced Form No. 26QC through electronic means to one of the authorized banks
- TDS Certificate (Form 16C) is to be issued
Rajkiran Ghosh
(480 Points)
Replied 03 June 2018
sir one thing is not clear if i pay rs 60000 for 2 months rent in f.y. 2017-18...then will i deduct tds on rs 120000 in whole f.y. 2017-18????
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