Amendment in TDS on Rent

Amendment in TDS on Rent



If you have paid rent more than Rs. 50000/- then you have to comply with section 194IB, which is recently introduced in the Finance Act 2017. It is applicable to Individual or Hindu Undivided Family who are not required to have Tax Audit as per Income Tax Act.

What is impact of GST on Rent can be refer on link…..

Section 194IB is read as under:

  • “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.”

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.]

Due Date for payment:

According to Rule 30(2B):

  • Any sum deducted under section 194IB is required to be paid to the Central Government within a period of 30 days from the end of the month in which the deduction is made and shall be accompanied by a challan cum statement in the Form No. 26QC.
  • Also the certificate of deduction of tax at source is Form No.16C & it has to be submitted to the payee within fifteen days from the due date for furnishing the challan-cum-statement.

Whether TAN No is required?

For the purpose of filling TDS Return it is mandatory to have TAN No., So a Taxpayer who is required to comply with the section 194IB should obtained TAN No.

 What are the consequences if failure to comply?

  • Interest @ 1% per month will be levied if TDS is not deducted & 1.5% per month will be levied if TDS is deducted but not paid.
  • The penalty of Rs. 100 per day will be levied if return is filed after due date. The total penalty amount shall not exceed amount of TDS.

By- CA. Monika N Rathi