- Time of Deduction- One time in a year i.e. annually in the last month of previous year or in the month before the tenant vacates the flat.
- Deductor- Any Individual/ HUF, who is not liable to tax audit in the preceding FY, but is paying rent in excess of Rs. 50,000 per month.
- Deductee-
- TDS Rate- 5% of rental income. TDS deducted shall be payable within 30days from end of the month in which deduction was made.
If PAN is not furnished by the landlord, then TDS to be deducted at a higher rate.
- Points to Note-
- This section is not applicable to the individuals/ HUF who are covered under section 194I.
- Tenant can be resident or non-resident. Both are liable to deduct TDS under this section.
- The property can be situated in or outside India. TDS will be deducted only if the payment is made to the resident.
- TDS shall be deducted on component of rent paid for use of lands or building only. Rent on any other thing like furniture shall not be covered here.
- Property can be used for any purpose by tenant i.e. commercial or residential.
- If TDS is deducted under this section, there is no requirement of a TAN.