TDS on payment of rent by Individual or HUF is covered under the Section 194IB of the Income Tax Act. This section was inserted because the government felt that income through payment of rent by Individual or HUF should be covered under TDS Deduction. This article discusses all the aspects of TDS on payment of rent by Individual or HUF.

Who has to deduct TDS on Rent?

From June 1, 2017, Individuals and HUFs who don’t have to get their books of accounts audited and paying rent of more than Rs 50,000 has to deduct TDS at the specified rate.

Rate of TDS

TDS on payment of rent by Individual or HUF has to be deducted at the rate of 5%.

Rent as per section 194IB

”Rent” as per the provisions of the section 194IB means any payment under any lease, tenancy, sub-lease,  or any other agreement or arrangement for the use of any:

  • Building (including factory building);
  • Land;
  • Land appurtenant to a building (including factory building);
  • Machinery;
  • Plant;
  • Furniture;
  • Equipment;
  • Fittings.

whether it may be owned by the payee or not.

Time Limit

Time limit to deposit TDS on Rent:

In case of Non-Government Assessee

  • Tax for the month of March – 30th April
  • Tax for any other month – 7th Day of the next month

In case of Government Assessee

  • In case the tax has to be deposited without challan – Same Day
  • In case the tax has to be deposited with challan – 7th Day of the next month

Conditions to deduct TDS

As per section 194IB, the following conditions have to be fulfilled to deduct TDS:

  • Section 194IB applies only to the individuals and HUFs who do not have to get their books of accounts audited under the Income Tax Act.
  • For individuals and HUFs which are covered under the income tax audit, Section 194I lays down the TDS requirements.
  • Rent payment must exceed INR 50,000 for a month or a part of the month.

 

In case you are confused about TDS Return Filing as a deductor, feel free to consult the experts at LegalRaasta. You can get comprehensive assistance with our TDS Return Filing Software which supports TDS on Salary payments (Form 24Q), Rent, Interest, Commission and other Non-salary transactions (Form 26Q), NRI (Form 27Q)and TCS (Form 27EQ).