Section 194-IB requires any person, being individual or HUF, other than that individual or HUF whose total sales, gross receipts, or turnover from the business or profession exceeds Rs. 1 crore in case of business and Rs. 50 lakhs in case of the profession in the financial year immediately preceding the financial year in which such rent was credited or paid, responsible for paying to a resident any income by way of rent, to deduct income tax @5%.
In case PAN is not available TDS @20% will be applicable.
WHEN TO MAKE TDS
Under this section, tax has to be deducted at source only if the amount of such rent exceeds Rs. 50,000 for a month or part of a month during the previous year.
AT WHAT POINT ,TDS TO BE MADE
This deduction is to be made at the time of credit of such rent, for the last month of the previous year or the last month of tenancy, if the property is vacated during the year, as the case may be, to the account of the payee or at the time of payment thereof in cash or by the issue of cheque or draft or by any other mode, whichever is earlier.
Where the tax is required to be deducted as per the provisions of section 206AA, such deduction shall not exceed the amount of rent payable for the last month of the previous year or the last month of the tenancy, as the case may be.
Tenants must deduct and pay the tax to the government once per financial year. A challan-cum-statement, Form 26QC should be used to make this payment. Further, the tenant must provide Form 16C, a TDS certificate to the landlord as proof of the tax deposited.
In case of non-deduction of taxes, the tenant may have to pay a penalty that is equivalent to the amount of taxes deducted.
If the tax deposited to the government is delayed, penal interest of 1% for delay in deducting and depositing and 1.5% for delay in depositing tax will be levied.
In case of failure on the filing Form 26QC within 30 days from the end of the month in which tax payment is made, will result in a late fee of Rs 200 per day.
The provisions of section 203A containing the requirement of obtaining a Tax deduction account number (TAN) shall not apply to the person required to deduct tax in accordance with the provisions of section 194-IB.
"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.
RELATED CASE LAWS
K. Vinuthna Reddy VS. ITO
ITO VS. Kamal Kishore Toshniwal
DISCLAIMER
The article disclaims any liability in connection with the use of the information published herein. All the information on this website is published in good faith and for general information purposes only.
تعليقات