Interim Budget 2019 announced way ahead Lok Sabha election, has increased the threshold for deduction u/s 194I – TDS on Rent to Rs 240000 increasing it by Rs 60000. The earlier limit was Rs 180000 which will be applicable till FY 2018-19.
Whenever we hear the word ‘rent’, the first thing which comes to mind is the payment which knocks on the door at the end (or beginning) of every month. It can be in any form like house rent, machine rent, building rent, office rent, and the list is endless. Hence it does not come as the surprise that Section 194I, i.e. TDS on Rent impacts millions of people across India. Let’s know about this section more in detail.Who has the need to deduct TDS u/s 194I?
Any person (who is not an Individual/HUF) pays to another resident an income by way of rent is required to deduct TDS u/s 194I. But if the Individual/HUF becomes liable to audit u/s 44AB (a) and (b) then he/she is required to deduct TDS under this section.What is Rent?
Rent means any payment made under lease or sub-lease or tenancy or any agreement for use of the following:
The rate of tax under this section is as follows:
And the time of deducting tax is earlier of, the credit of income to the account of the payee (receiver) or actual payment (in cash, cheque, draft or other modes).
But, if such payment is made by an employee or individual (who represents the company) and is later gets reimbursed then no TDS will be leviable. However, if such individual is liable to audit u/s 44AB then TDS will be levied.
We saw that how section 194I makes only those Individual/HUF liable to TDS who are required to get accounts audited u/s 44AB. Hence, to widen the coverage and bring in ambit those individuals or HUF who pay big amount of rent but are still not liable to audit, Section 194IB was introduced in Budget 2017.Who has the need to deduct TDS u/s 194IB?
Any person (who is an Individual/ HUF but not liable to audit u/s 44AB) pays income by way of rent to a resident is required to deduct TDS under this section.What is the rate & time of tax deduction u/s 194IB?
The rate of the tax deduction is 5% and if the PAN of the recipient is not available then the rate will be 20%. But the amount of TDS cannot exceed the amount of rent paid for the last month. Time of tax deduction is, earlier of:
This provision has been inserted recently from Budget 2017 and the objective was to bring under scope ‘Joint Development Agreements’. So let’s understand this section in detail:Who has the to deduct TDS u/s 194IC?
Any person who pays to a resident some consideration (not in kind) under a Joint Development Agreement, has to deduct TDS u/s 194IC.What is Joint Development Agreement?
This is an agreement between the owner of an asset (being land or building or both) who agrees to allows another person to build a real estate project on such asset, in return for share and/or payment in cash.What is the rate & time of tax deduction u/s 194IC?
The rate of the tax deduction is 10% and if the PAN of the receiver is not available then the rate is 20%. Time of deducting tax is earlier of, the credit of income to the account of the payee (receiver) or actual payment (in cash, cheque, draft or other modes). Also, there is no threshold limit (exemption limit) under this section.
Complete guide covering all the basic tax related terms. So, that tax terms will not work as a road-stopper in your way!!
Comprehensive Guide containing all Information that you must know while filing of your ITR for FY 2018-19 (AY 2019-20).
Free Income Tax Calculator for Assessment Year (AY) 2018-2019 and AY 2017-2018 with new budget changes.
Calculate HRA exemption based on your salary for AY 2018-19. Make accurate calculations of HRA for employees.
Hire smartest eCA's to File Your Income Tax Return. CA Assisted Filing of ITR. File your Income Tax Return with confidence and ease.
Tax2win is an efiling portal to prepare and efile income tax return Online. Tax2win helps individuals to file their income tax return.