PAYMENT OF RENT TO NRI BY A PVT LTD CO

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When a private limited company pays rent to an NRI for property in India, TDS must be deducted under Section 195 of the IT Act. The applicable rate is 31.20% (including surcharge and cess). Payments require Challan 281 and Form 27Q for returns. Tenants must also complete Form 15CA, and if annual rent exceeds £5 lakh, Form 15CB from a CA is mandatory. However, if rent is paid to an NRO account, Forms 15CA and 15CB may not be required.

Bhai

Bhai (Querist)
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06 May 2022 Sirs

Ours is a private limited company and we have taken a premises on rent.
Owner of the property is an NRI. Monthly rent is Rs.105000/-.

Kindly clarify the applicable TDS rate and under which section. What returns/challans we have file for this.

Thanks.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 May 2022 Under section 195 of the IT Act, rent received by an NRI on property located in India, TDS at the rate of 30% of the rent paid should be deducted by the payer.
Use 281 challan and Form 27Q.

CA Puja Sharma

CA Puja Sharma (Expert)
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06 May 2022 Yes, deduct TDS us 195 at the rate of 30%.
The TDS return u/s 27Q shall be filed by the 15th of the month following the quarter.

Bhai

Bhai (Querist)
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06 May 2022 Sir

Tax rate 30% or 31.20% (30%+4% Cess).

It is mandatory for tenants to fill Form 15CA on the income tax portal every time rent is paid.

If the total rent paid per annum exceeds Rs.5 lakh, the tenant must obtain Form 15CB from a Chartered Accountant.

Thanks.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 May 2022 It's 31.20% (30%+4% Cess).
Pay the amount to NRO account no need for 15CA and 15CB.

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