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.
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.
Land
Building
Plant
Machinery
Equipment
Furniture
Fittings
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.
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.
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 15th July
Jul-Sep 15th Oct
Oct-Dec 15th Jan
Jan-Mar 15th May
The deductor should deposit deducted TDS amount on or before seven days from the end of the month.
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
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