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.
This document covers
- What is Rent?
- Persons responsible to deduct TDS (Deductor)
- Rate of TDS
- Threshold for deduction u/s 194I-Rent
- Time of Deduction of TDS
- Due Date for TDS Payment
- TDS Returns
- 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 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