Tds on rent to two persons

As a tenant paying rent to two owners, you'll need to consider the TDS (Tax Deducted at Source) implications. TDS Threshold: The TDS threshold for rent payments is ₹2,40,000 per annum (Section 194-I of the Income Tax Act, 1961). Since you're paying a total rent of ₹80,000 per month (₹9,60,000 per annum), you exceed this threshold. TDS Applicability: As the total rent paid exceeds the threshold, TDS is applicable. However, since you're paying rent to two owners, you'll need to consider their individual shares. TDS Calculation: Assuming both owners have an equal share (40,000 each), you'll need to deduct TDS on each payment. The TDS rate is typically 5% for rent payments (Section 194-I). TDS Compliance: To comply with TDS regulations: 1. Obtain the PAN (Permanent Account Number) of both owners.

2. Deduct TDS at 5% on each rent payment (₹2,000 per owner, per month).

3. Deposit the TDS with the government using Challan 281.

4. File Form 26Q (quarterly TDS return) and provide the owners with Form 16A (TDS certificate).

if your query is for rent being paid by an individual in his personal copacity for the purpose of residential property, then in this case TDS woul not apply. If not, then the above response shall be followed.

Ok thanks. The tds is applicable if I pay more than 50000 per month to each owner.I.e. Rs 6lacs per year to each owner.Is it correct. ?

Yes, as per the Income Tax Act, TDS on rent is applicable under Section 194I or Section 194IB, depending on the payer's status. Here's how it applies in your case:

1. If you are an individual or HUF (not under audit):

• Section 194IB applies if the total rent paid exceeds ₹50,000 per month.

• Since you are paying ₹40,000 each to two owners (₹80,000 total), but no single owner receives more than ₹50,000, TDS under Section 194IB is not applicable.

2. If you are a Business (subject to audit):

• Section 194I applies if the total rent paid exceeds ₹2,40,000 per year per owner.

• Since you are paying ₹4,80,000 annually to each owner, TDS @ 10% must be deducted and deposited with the government.

Conclusion

• For individuals (not under audit) – No TDS required.

• For businesses (under audit) – TDS @ 10% must be deducted.

Make sure to verify your status to comply with the correct TDS provisions. Consult Financial & Taxation Experts at Setindiabiz.com! 

How to fill HRA exemption in ITR-1 when rent paid is Rs. 90,000 per month split equally to 2 co-owners of the property? Also, how to ensure there is no email/query/notice is received from IT department stating no TDS was deducted.

Thanks for giving required details as per provisions.