TDS on Rent
Income Tax Department advisory to deduct and pay TDS on rent u/s 194IB under which individual/HUF are obliged to deduct if rent exceeds Rs. 50000/- per month.
In order to widen the scope of tax deduction at source, the Finance Act, 2017 w.e.f. 1st June, 2017 has inserted a new section 194-IB in the Income Tax Act, 1961 to provide that Individuals or a HUF (other than those covered under 44AB of the Act), responsible for paying to a resident any income by way of rent exceeding fifty thousand rupees for a month or part of month during the previous year, shall deduct an amount equal to five per cent. of such income as income-tax thereon.
In order to reduce the compliance burden, the section provides that:
(a) The deductor shall not be required to obtain tax deduction account number (TAN) as per section 203A of the Act.
(b) The deductor shall be liable to deduct tax only once in a previous year.
Income Tax Department has issued the following advisory to remind the tenants the provisions of the newly inserted section and tax compliance required in this regard.
Income Tax Department advisory to pay TDS on rent u/s 194IB
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