The CBDT amended the rules relating to TDS as “TDS on Rent u/s 194IB” to make provisions for an individual or a HUF who is responsible for paying to a resident any income by way of rent exceeding fifty thousand rupees for a month or part of month during the previous year, shall deduct an amount equal to five percent of such income as income-tax thereon.
The said tax deductible at source (TDS) is deductible at the rate of 5% of the rent paid or payable. If the person receiving rent doesn’t furnish his PAN then TDS is deductible at the rate of 20% subject to maximum limit of amount of rent payable for the month of march or last month of tenancy as the case may be.
The notification from the CBDT can be found below:
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES) NOTIFICATION
New Delhi, the 8th June, 2017
G.S.R. 561(E).—In exercise of the powers conferred by section 295 read with section 194-IB of the Incometax Act, 1961, the Central Board of Direct Taxes, hereby, makes the following rules further to amend the Income-tax Rules, 1962, namely:-
1. (1) These rules may be called the Income-tax (13 th Amendment) Rules, 2017.
(2) They shall come into force from the date of their publication in the Official Gazette.
2. In the Income-tax Rules, 1962 (hereafter referred to as the principal rules), in rule 30, –
(a) after sub-rule (2A), the following sub-rule shall be inserted, namely:-
“ (2B) Notwithstanding anything contained in sub-rule (1) or sub-rule (2), any sum deducted under section 194-IB shall be paid to the credit of the Central Government within a period of thirty days from the end of the month in which the deduction is made and shall be accompanied by a challan-cum-statement in Form No. 26QC.”;
(b) after sub-rule (6A), the following sub-rule shall be inserted, namely:—
“(6B) Where tax deducted is to be deposited accompanied by a challan-cum-statement in Form No.26QC, the amount of tax so deducted shall be deposited to the credit of the Central Government by remitting it electronically within the time specified in sub-rule (2B) into the Reserve Bank of India or the State Bank of India or any authorized bank.”.
3. In the principal rules, in rule 31, after sub-rule (3A), the following sub-rule shall be inserted, namely:—
“(3B) Notwithstanding anything contained in sub-rule (1) or sub-rule (2) or sub-rule (3), every person responsible for deduction of tax under section 194-IB shall furnish the certificate of deduction of tax at source in Form No.16C to the payee within fifteen days from the due date for furnishing the challan-cum-statement in Form No.26QC under rule 31A after generating and downloading the same from the web portal specified by the Principal Director General of Income-tax (Systems)or the Director General of Income-tax (Systems) or the person authorised by him.”
4. In the principal rules, in rule 31A, after sub-rule (4A), the following sub-rule shall be inserted, namely:—
“(4B) Notwithstanding anything contained in sub-rule (1) or sub-rule (2) or sub-rule (3) or sub-rule (4), every person responsible for deduction of tax under section 194-IB shall furnish to the Principal Director General of Income-tax (Systems) or Director General of Income-tax (System) or the person authorised by the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) a challan-cum-statement in Form No.26QC electronically in accordance with the procedures, formats and standards specified under sub-rule (5) within thirty days from the end of the month in which the deduction is made.”
The rest of the notification which contains formats and tables can be found here: The CBDT amends Rules relating to TDS on Rent u/s 194IB Notification.
– Wife is the first holder and husband is the joint holder for a flat taken on rent.
– The cheques for the rent for the months June 2017 to September 2017 have been issued from wife’s bank account.
– Now, rent cheques from October 2017 onwards want to give from husband’s bank account (and earlier four month rent given from wife’s bank account to be reimbursed from husband’s bank account).
In the above case, who pays TDS @ 5%:
– the wife pays TDS for four months within 30 days of 30th Sep 2017 and husband pays TDS for six months after 30th Mar 2018 ?
– husband pays TDS for ten months (i.e. from Jun 2017 to Mar 2018) (since husband reimburses to wife the four months rent paid by her)
The wife will pay for four months and husband will pay for remaining six months.
In case husband-wife are joint owners of a flat and rent out the same, would TDS be applicable if 25,000 per month rent each is paid to husband and wife (total rent 50,000 per month)?
Yes, TDS will be applicable in both cases as the minimum threshold of Rs. 1.8 Lakh will exceed in both the cases.
Sir or mam .I have one commercial building .I had given a rent to a person to do a bussiness like automobile showroom .at rupee 19 thousand .permonth for 3 years .does TDs cut in my rend money please say me
Dear Sir, if the business is a registered one with TAN allotted, then TDS will be deducted from the rent as it crosses the Threshold for the financial year.
Hi, If the owner of house property is NRI than also this section applies.
And did he has to file ITR even if he is non resident only of the income from such house property
Yes, the section applies to NRI too. They too have to file ITR for such income