Updated on November 28, 2024 12:01:54 PM
For generating income from house property many landlords offer their house property on rent. In case rent on house property exceeds Rs 50,000 per month, then the tenant has to deduct the TDS at 5% on rent payable. This rate has been proposed to be reduced from 5% to 2% with effect from 1st October 2024.
Under Section 194IB, TDS is deductible and is deposited by the tenant who occupies the house property for the usage in exchange of monetary/rental payment to the owner (landlord). The prime objective of getting this TDS certificate for rent is to simplify the procedures of tax payments made to the government. In order to file the TDS return, CA professionals are rather recommended over a mere individual who will proceed with the whole process for filing the TDS return for housing rent. In this article, we will provide you with complete insights into how to proceed with the TDS rate on house rent.
TDS on house rent under Section 194-IB states that the tenant who gains the right to occupy the house in exchange of rental or lease payments, needs to deduct and deposit TDS with the central government. The term 'rent' is referred to by name within the criteria for any tenancy, lease, sublease, agreement, or arrangement that facilitates the utilization of land, buildings, machinery, equipment, or fitting.
The TDS on house rent is applicable when payer of rent is HUF or individual including salaried employees to a resident person. The amount of rent should exceed Rs. 50,000 per month.
Section 194-IB TDS on house rent is not applicable under the following:
Here are the TDS rates, which are categorized on the basis of the nature of the property for which the rent is paid:
Particular | Deduction Criteria |
---|---|
Threshold limit for house rent | Amount exceeding Rs. 50,000 per month |
TDS Rate on house rent | Up to 20 September 2024: 5% on the entire rent amount From 1st October 2024: 2% on the entire rent amount |
The PAN number of the landlord is important for processing the TDS at the proposed rate. If PAN is not provided by the landlord, then TDS rate will increase to 20%.
TDS on house property is required to be deducted at the time of credit or actual payment of the last month rent, whichever is earlier. In case, the tenant is vacating the property in the middle of the financial year, TDS is required to be deducted in the last month of tenancy.
After the sum is deducted u/s 194-IB, then the time limit for depositing the TDS using the challan cum return in Form 26QC is 30 days from the end of the month in which TDS was deducted.
After filing the Form 26QC, the tenant must provide Form 16C, a TDS certificate, to the landlord as proof of the tax deposited.
Here are the 4 documents that are required at the time of TDS return filing:
TAN number is not required for the deductor or tenant while deducting and depositing the TDS on house rent.
Here are the penalties and fines under TDS on house rent:
At Bizfoc, we specialize in providing you the best accounting services in filing your TDS for the purchase of property. Here are the reasons why we are known for our services to our clients on filing TDS:
In general, we assist the client to solve their queries and doubts regarding the documentation, procedures, and fees for filling out the form. Other than making your filing successful, we help you make a better decision by covering every aspect of what you actually need to get your TDS.
TDS on house rent is a crucial tax implication, which is done under Section 194-IB. The TDS deduction is crucial for maintaining the tax regulations and standards under the Income Tax Act. Filing the TDS by an individual himself can be a cumbersome and tiring process. So, it is advisable to get the TDS filed with the help of CA professionals and experts to get ease in filing TDS.
The Challan ITNS 281 refers to the form that is used for making the tax payment. This form is issued to reduce the method for filing tax collection details, deposition, or collection manually and encourage filing the tax online to eliminate the usual chance of errors.
Section 194-IB is applicable for HUF because an individual who belongs to HUF is liable to deduct TDS on entire rent amount if the rent amount exceeds Rs 50,000 per month.
Form 26-QC is a challan cum statement that is used for depositing the TDS amount with the government within 30 days from the end of month in which TDS is deducted.
No, the TDS won't be applicable on security deposits that are already given to the landlord unless security deposits are included under the rent amount.