Section 194IB – TDS on Rent (for Individuals & HUF)

Effective from 1st June 2017, individuals & HUF not covered under tax audit have been 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

Relevant resources:

Section 194IB

Notification dated 8th June 2017 with formats of Form No. 26QC & Form No. 16C

What is form26QC?

What is form 16C?

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