Section 194ib

This query is : Resolved

CA. NIKHIL CHITTORA (Querist)
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12 September 2017 When to deduct and pay TDS under section 194IB?
We pay rent of 1 lakh per month on monthly basis. Do we have to deduct tax on each payment or at the payment of rent of month of March 2018?

Section 194 IB(2)
2. The income-tax referred to in sub-section (1) shall be deducted on such income at the time of credit of rent, for the last month of the 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 thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier.

At the time of payment "Thereof" what does this symbolises? It is indicating last month of previous year?

CMA Ashutosh Kumar Gupta

CMA Ashutosh Kumar Gupta (Expert)
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12 September 2017 Per implication of Section 194IB as applicable for rent payment by a person >rs.50k per month, TDS to be deducted @5% on the rent payment which is payable in the last month of previous year,e.g. if someone pays rent @100000/- he may continue to pay the same in remaining months of FY but in the last month to deduct TDS annually i.e. Rs.60000/- hence rent payable in last month would be rs.40k instead of rs.1Lac.

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