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Tds - urgent

riddhi (student) (746 Points)

15 June 2017

As per the finance act, 2017 do we need to deduct tds at 5% u/s 194IB along with 10% u/s 194I if the rent is 50K per month. Also does this apply to personal purpose or only commercial ?

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7 Replies

MANJU MC (Student CA IPC / IPCC) (50 Points)
Replied 15 June 2017

it is Only for commercial purpose

CA Mayur Todmal (Practicing CA) (7645 Points)
Replied 15 June 2017

The Finance Bill, 2017 proposes to insert new section 194-IB to provide that an Individual or a HUF (other than those covered under clause (a) 85 (b) of section 44AB of the Act), 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 per cent. of such income as income-tax thereon. -

CA Mayur Todmal (Practicing CA) (7645 Points)
Replied 15 June 2017

riddhi (student) (746 Points)
Replied 15 June 2017

ok. it is cleared now. thank you so much

PRABIR PAUL (*****Accountant***** Never insult to any person for any kind of lack of knowledge or misread.) (1443 Points)
Replied 15 June 2017

Personal, commercial whatever both it's attract.......

rama krishnan (12234 Points)
Replied 15 June 2017

threshold limit for 194IB is 50000 per month and 50000 per annum as given by mr. mayur

Girish Momaya (Tax consultant) (43 Points)
Replied 16 June 2017

Effective from 1st June 2017, individuals & HUF not covered under tax audit would be subjected to TDS for rent payments if it is Rs. 50,000 or more per month.

Salient features:

Applicable only to individuals & HUF who are not under tax audit (under section 44AB)
This section is applicable from 1st June 2017
Tax Account Number (TAN) not required for the deductor
Applicable to monthly Rent of Rs. 50,000/- or above
TDS @ 5% if rent receiver is holding PAN, or otherwise TDS would be @ 20%
Deduction of Tax is to done in the last month of previous year (i.e. March) or in the month when the premises is vacated
Deposit to be made within 30 days from the end of month when tax was deducted. As an illustration, if deduction was in March, it should be deposited by 30th April or if deduction was in December, it should be deposited by 30th January.
The deducted tax is to be deposited in the newly introduced Form No. 26QC through electronic means to one of the authorized banks
TDS Certificate (Form 16C) is to be issued