TDS on Rent Section 194I

The Government of Income Tax has announced to increase the threshold limit on TDS on rent payment from 1,80,000 to 2,40,000 for the financial year 2019-2020.

 

 

 

Who is Liable to Deduct TDS on Rent?

 

The person who are paying rent of Rs.2,40,000 per annum during the financial year is responsible to deduct TDS (Excluding Individual or HUF) on rent payable amount.

 

 

TDS rate on rent payable is 10%, tax to be deducted if the rent amount exceeds more than 2,40,000 during the financial year.

 

 

 

TDS on Rent Payment Covered Under Section 194I

 

Land

 

Building

 

Plant

 

Machinery

 

Equipment

 

Furniture

 

Fittings

 

 

 

TDS on Advance Rent 

 

In case of rent advance paid by the tenant for future refundable purpose then not require to deduct TDS. If the rent advance will be adjusted in future then TDS should be deducted.

 

 

What is TDS Rate on Rent?

 

Rent on plant & machinery @ 2%

 

Rent on land, building & furniture @ 10% (TDS 5% is applicable if rent amount exceeds Rs.50,000 per month and paid by individual/HUF who are not liable under tax audit during the FY)

 

Note: the higher rate of TDS will attract incase of not furnishing of PAN@20%

 

Surcharge, education cess and secondary education cess are not applicable.

 

 

 

Filing of TDS Return and Due Dates

 

The TDS deductor should file form 26Q on or before the return due date. The below are the TDS return filing due dates.

 

Quarter           Due Date

 

Apr-Jun           15^th July

 

Jul-Sep            15^th Oct

 

Oct-Dec           15^th Jan

 

Jan-Mar          15^th May

 

 

 

Due Date to Deposit TDS

 

The deductor should deposit deducted TDS amount on or before seven days from the end of the month.

 

 

 

TDS Certificate

 

The deductor should issue form 16A to the deductee on quarterly basis.

 

 

 

Accounting Entry

 

Rent paid A/c Dr

 

GST@18% A/c Dr

 

To TDS on rent – 194I A/c

 

To Vendor A/c

 

 

 

Payment to Vendor

 

Vendor A/c Dr

 

To Bank A/c