Tds on rental income

Deduction of TDS on rent u/s. 194-IB:

Payment Covered

Payment of rent to a resident for land or building exceeding Rs. 50,000 per month is liable for tax deduction. Payment of rent paid or payable after 1st June 2017 are covered  only.

TDS Rate

TDS is deductible at the rate of 5% of the rent paid or payable. If the person receiving rent doesn’t furnish his PAN then TDS is deductible at the rate of 20% subject to maximum limit of amount of rent payable for the month of march or last month of tenancy as the case may be.

Time of Deduction

TDS is to be deducted only one time in a year and not in every month. TDS is to be deducted at earlier from the following

1. Time of credit of rent to the account of payee for the month of march or the last month of tenancy, if property is vacated during the year as the case may be.
2. Time of payment of rent to payee for the month of march or the last month of tenancy , if property is vacated during the year as the case may be.

TAN no. Not required

TAN number is not required by such person to deduct and deposit TDS.

If an individual is liable for audit in previous year then he is covered under section 194I. Otherwise tds should be deducted under section 194ib for rent of more than rs. 50,000 per month.