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Home > TDS > TDS On RentLast Updated: Nov 16th 2024

TDS On Rent u/s 194I, Filing Form 26Q — Explained

Rent means any payment for the use of land or building or land apartment to building or plant or machinery or equipment or furniture or fittings.


Form 26Q: TDS On Rent u/s 194-IB

This document covers

  1. What is Rent?
  2. Persons responsible to deduct TDS (Deductor)
  3. Rate of TDS
  4. Threshold for deduction u/s 194I-Rent
  5. Time of Deduction of TDS
  6. Due Date for TDS Payment
  7. TDS Returns
  8. Lower deduction /Nil deduction of TDS

1. What is Rent?

  • Rent means any payment for the use of land or building or land apartment to building or plant or machinery or equipment or furniture or fittings.
  • Rent is also known as lease, sub lease, tenancy or any other agreement.
  • Section 194I of Income Tax Act 1961 deals with TDS on Rent

2. Persons responsible to deduct TDS (Deductor)

Any person other than individual/HUF whose total sales or turnover from the business does not exceeds Rs 1 crore in case of business and Rs 50 lakhs in case of profession are required to deduct TDS u/s 194-I on the rental payments

Note 1 : TDS u/s 194I needs to be deducted only on the rental payments made to Resident Landlords. Section 195 deals with payments to NRI's.

Note 2 : Individuals or HUF who are paying a rent of Rs 50,000 or more are required to deduct TDS @ 5% (w.e.f 01st Oct 2024 — 2%) u/s 194IB and need to file form 26QC. Kindly refer TDS On Rent u/s 194-IB, Filing Form 26QC Explained for more information

3. Rate of TDS

The TDS needs to be deducted at following rates

  • Plant, Machinery or Equipment: 2%
  • Land or Building or furniture or fittings: 10%

4. Threshold for deduction u/s 194I-Rent

The TDS on rent needs to be deducted only if the amount or aggregate of amounts paid to a person during the financial year exceeds Rs 2,40,000

5. Time of Deduction of TDS

TDS u/s 194-I needs to be deducted at the following times which ever is earlier

  • At the time of credit of amount to Payee
  • At the time of payment of amount to Payee

6. Due Date for TDS Payment

The due date for payment of TDS deducted u/s 194I is within 7 days from the end of the month in which deduction is made. However, for the March month, due date is April 30

7. TDS Returns

  • TDS Returns needs to be filed in Form 26Q for all persons except the individuals or HUF who are not liable to Audit
  • TDS Return filing is Quarterly
  • The due dates for the TDS Returns are as follows
    • April to June — July 31
    • July to September — October 31
    • October to December — January 31
    • January to March — May 31
  • TDS Certificates needs to be issued within 15 days from the date of filing in Form 16A

8. Lower deduction /Nil deduction of TDS

The Payee can apply for lower deduction or nil deduction of TDS in Form 13 and submit the certificate to deductor for non-deduction or lower deduction of TDS

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