Regarding tds

This query is : Resolved

P. Shah (Querist)
Follow

24 August 2016 suppose for eg. Mr A is paying house rent for Rs 2,40,000 annually to Mr B . In these case both of them are individuals. is tds to be deducted by Mr A while making payment to Mr B as it has crossed the threshold limit of Rs 1,80,000. And apart from this Mr A is not holding tan no. please kindly clarify me in simple language and not in legal language.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
Follow

24 August 2016 Mr A is liable for tax audit during the previous year then TDS has to be deducted. Otherwise no TDS applicable on this payment.

P. Shah

P. Shah (Querist)
Follow

26 August 2016 Sir but however he is liable to tax audit. He is an individual

P. Shah

P. Shah (Querist)
Follow

26 August 2016 Sir but tan no is compulsory to deduct TDs. then why tax audit?

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
Follow

20 July 2025 Got it, here’s a simple explanation:

TDS on Rent Payment by Individuals:

If Mr. A (the payer) is an individual or HUF paying rent for more than Rs. 1,80,000 per year, he must deduct TDS (section 194-IB applies).
TDS rate is 5% on rent paid above that limit.
No TAN is required for individuals or HUFs deducting TDS under section 194-IB. They just need to deduct TDS and deposit it with the government.
Tax audit status of Mr. A doesn’t affect the obligation to deduct TDS on rent. The key condition is the rent amount exceeding Rs. 1,80,000.
In short:
If Mr. A pays rent over Rs. 1,80,000 in a year to Mr. B, he must deduct 5% TDS, deposit it, and file TDS returns. TAN is not mandatory for this specific TDS deduction by individuals.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now