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TDS on rent, security deposit and brokerage

Archana (21 Points)

25 December 2024

Is the tenant liable to deduct tds on rent, security deposit payable to the landlord? If yes at what rate? Also whether tds should be deducted from the brokerage payable to the estate agent? If yes then at what rate? Please respond. Thanks

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Rama chary Rachakonda (Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294) (6311 Points)
Replied 25 December 2024

Let's break down the TDS (Tax Deducted at Source) liability for the tenant:.

Rent Payments 1. *TDS Applicability*: Yes, the tenant is liable to deduct TDS on rent payments to the landlord, as per Section 194-I of the Income-tax Act, 1961.

2. *TDS Rate*: The TDS rate is 5% of the rent amount, if the rent exceeds ₹50,000 per month.

Security Deposit 1. *TDS Applicability*: No, TDS is not applicable on security deposits, as they are refundable and not considered income.

Brokerage Payments to Estate Agent 1. *TDS Applicability*: Yes, TDS is applicable on brokerage payments to estate agents, as per Section 194H of the Income-tax Act, 1961.

2. *TDS Rate*: The TDS rate is 5% of the brokerage amount. Important Notes

1. *Threshold Limits*: TDS is applicable only if the rent exceeds ₹50,000 per month or the brokerage amount exceeds ₹15,000.

2. *PAN Requirement*: The tenant must obtain the landlord's and estate agent's PAN (Permanent Account Number) to deduct TDS.

3. *TDS Return Filing*: The tenant must file TDS returns (Form 26Q) quarterly, providing details of TDS deducted and deposited.

4. *TDS Payment*: TDS must be deposited within the prescribed due dates to avoid interest and penalties. Please consult a tax professional or chartered accountant to ensure compliance with TDS regulations.

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sabyasachi mukherjee (27636 Points)
Replied 25 December 2024

Rent provided for business purposes is applicable fir gst.

sabyasachi mukherjee (27636 Points)
Replied 26 December 2024

Tds on rentvis applicable

NAPA SREJA (7 Points)
Replied 30 December 2024

The amount given as a security deposit to the owner of an asset is not liable to TDS u/s 194I if such amount is refundable in nature. But when that amount of 'deposit' is adjusted against rent, it becomes liable to TDS u/s 194I. Payment made for renting a business center is liable to TDS under this section.

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