What is 94i in TDS?
What is Section 194I? The person (not being an Individual or HUF) who is responsible for paying of rent is liable to deduct tax at source. TDS threshold for deduction of tax on rent is Rs 2,40,000 for the FY 2020-21.
Is it mandatory to deduct TDS on rent?
TDS @ 10% is required to be deducted in case the Rent paid/ payable during the Financial Year is more than Rs. 2.4 Lakhs. TDS on Rent in this case is required to be deducted under Section 194I @ 10% of the total amount paid or payable during the year. 2.4 Lakhs per annum.
Who has to deduct TDS on rent?
All individuals or HUFs (except those liable to audit under clause a and b of section 44AB) paying monthly rent to a resident in excess of ₹ 50,000 are liable to deduct TDS under section 194-IB.
What is the TDS rule?
TDS stands for tax deducted at source. As per the Income Tax Act, any company or person making a payment is required to deduct tax at the source if the payment exceeds certain threshold limits. It is the deductor’s responsibility to deduct TDS before making the payment and deposit the same with the government.
What is the TDS rate for rent?
Tax (TDS) Deduction Rates Rent for plant/ equipment/ machinery- 2% TDS on the rent amount paid. Rent for land/ building/ furniture/ fittings- 10% TDS on the rent amount paid. Individual/ HUF not liable to tax audit – 5% TDS on the rent paid in cases where more than `50,000 is paid per month as rent.
Why are there two sections of TDs 194i?
This has now been addressed and from the FY: 2013-14, Section 194I (Rent Payment) has now been bifurcated into two sections as under: As rent on plant & machinery and rent on property & furniture attracted different rate of TDS, there was lot of confusion which resulted in incorrect deductions leading to unintentional defaults.
How to pay TDs on rent under section 194ib?
Section 194-IB of the Income Tax Act, 1961 states that for all the transactions with effect from June 1, 2017, tax @3.75% should be deducted by the Tenant/ Lessee/ Payer of the property at the time of making payment of rent Online TDS Payment Procedure under 194IB Step 1: Open the URL, https://www.tin-nsdl.com/.
What is the limit for TDs on rent?
Threshold Exemption Limit for TDS on Rent under Section 194I. Section 194-I of the Income Tax Act, 1961 provides that no TDS would be deducted if the income credited / paid during the Financial Year does not exceed INR 2,40,000.
When is a security deposit liable to TDs?
The amount given as security deposit to the owner of an asset is not liable to TDS u/s 194I if such amount is refundable in nature. But when that amount of ‘deposit’ is adjusted against rent then it becomes liable to TDS u/s 194I. Payment made for renting a business center is liable to TDS under this section.