Section 194IB - TDS on payment of rent by certain individuals or Hindu undivided family - Income Tax - Ready Reckoner - Income Tax

Section 194IB - TDS on payment of rent by certain individuals or Hindu undivided family (1) Applicability Rate of TDS Applicability - Any person, being an individual or a Hindu undivided family, responsible for paying to a resident any income by way of rent exceeding 50,000 rupees for a month or part of a month during the previous year Exception:- An individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed ₹ 1 crore in case of business or ₹ 50 Lakhs in case of profession during the financial year immediately preceding the financial year in which such income by way of rent is credited or paid, shall be liable to deduct income-tax u/s 194I. (second proviso to section 194-I ) Rate of TDS 2% [ Substituted vide Finance (No. 2) Act, 2024 w.e.f. 01.10.2024 ] 5%. [ Upto 30.09.2024 ] (2) Time of deduction of tax at source at the time of credit of such rent, for last month of 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 in cash or cheque or by any other mode (3) No need TAN - The provisions of section 203A (requirement for obtaining TAN) shall not apply to a person required to deduct tax in accordance with the provisions of this section. (4) In a case where the tax is required to be deducted as per the provisions of section 206AA , (i.e. PAN is not provided by the recipient of the rent) 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. (5) No requirement for deducting tax, if rent does not exceeds Rs. 50,000 or Individual or HUF covered u/s 194-I . (6) Furnishing Statement - every person shall furnish a challan-cum-statement in Form No.26QC electronically in accordance with the procedures, formats and standards specified under rule 31A(5) within 30 days from the end of the month in which the deduction is made, to to the Director General of Income-tax (System) or the person authorised by the Director General of Income-tax (System). (7) Furnished TDS Certificate - every person 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. [ Rule 31(3B) ] Note - For the purposes of this section, 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. Example:- Mr. X a salaried Individual, pays rent of ₹ 55,000 per month to Mr. y from June 2023 to Dec. 2023. Is he required to deduct TDS? If he is vacated the premises in December 2023, then tax of ₹ 19,250 [ ₹ 55,000 x 5% x 7 Months ] has to be deducted TDS from rent payable for December 2023. If he is not vacated the premises in that case in the march 2024, then tax of ₹ 27,500 [ ₹ 55,000 x 5% x 10 Months ] has to be deducted TDS from rent payable for March 2024. If PAN does not furnished or not linked with the Aadhar then TDS would be deducted @20%.