TDS on Payments of Rent by certain Individuals or HUF (Section 194-IB)

1. Who is liable to Deduct TDS under Section 194-IB

2. When TDS under Section 194-IB is to be Deducted [Section 194-IB(2)]

3. When No TDS under Section 194-IB is to be Deducted

4. TDS Rate under Section 194-IB for the Financial Year 2018-19 and 2019-20

5. No requirement for obtaining TAN by the Deductor to Deduct TDS under Section 194-IB(3)

6. Amount of TDS under Section 194-IB when PAN is not provided by the recipient of the Rent [Section 194-IB(4)]

7. Provisions relating to TDS from payment of Rent by certain Individuals or HUF under Section 194-IB

1. Who is liable to Deduct TDS under Section 194-IB

Any person, being an individual or a Hindu undivided family (other than those referred to in the second proviso to section 194-I), responsible for paying to a resident any income by way of rent.

Explanation.—For the purposes of this section, “rent” means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of any land or building or both.

2. When TDS under Section 194-IB is to be Deducted [Section 194-IB(2)]

Tax is to be deducted:

1. at the time of credit of rent, for the last month of the previous year or the last month of tenancy, if the property is vacated during the year, as the case may be, to the account of the payee or

2. at the time of payment thereof (i.e. rent of last month) in cash or by issue of a cheque or draft or by any other mode,

whichever is earlier.

3. Where No TDS under Section 194-IB is to be Deducted

1. No tax is required to be deducted at source under this section where the rent does not exceed Rs.50,000 for a month or part of a month during the previous year.

2. When the individual or HUF is covered under section 194-I.

4. TDS Rate under Section 194-IB for the Financial Year 2018-19 and 2019-20

5% of such income by way of Rent

5. No requirement for obtaining TAN by the Deductor to Deduct TDS under Section 194-IB(3)

The provisions of section 203A (relating to obtaining TAN) shall not apply to a person required to deduct tax in accordance with the provisions of this section.

6. Amount of TDS under Section 194-IB when PAN is not provided by the recipient of the Rent [Section 194-IB(4)]

As per section 206AA, if the PAN is not provided by the recipient of the rent rate of TDS is 20%.

However, under this section (i.e. section 194-IB) if PAN is not provided, such deduction shall not exceed—

1. the amount of rent payable for the last month of the previous year, or

2. the last month of the tenancy,

   as the case may be.

7. Provisions relating to TDS from Payment of Rent by certain Individuals or HUF under Section 194-IB

1. Time of Deposit of TDS [Rule 30(2B)]

Any sum deducted under section 194-IB shall be paid to the credit of the Central Government within a period of 30 days from the end of the month in which the deduction is made and shall be accompanied by a challan-cum-statement in Form No. 26QC.

2. TDS to be Deposited Electronically [Rule 30(6B)]

Where tax deducted is to be deposited accompanied by a challan-cum-statement in Form No.26QC, the amount of tax so deducted shall be deposited to the credit of the Central Government by remitting it electronically within the time specified in rule 30(2B) into the Reserve Bank of India or the State Bank of India or any authorized bank.

3. Furnishing of Challan-cum-Statement in Form No. 26QC [Rule 31A(4B)]

Every person responsible for deduction of tax under section 194-IB shall furnish to the Principal Director General of Income-tax (Systems) or Director General of Income-tax (System) or the person authorised by the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) a challan-cum-statement in Form No.26QC electronically in accordance with the procedures, formats and standards specified within 30 days from the end of the month in which the deduction is made.

4. Certificate of TDS [Rule 31(3B)]

   Every person responsible for deduction of tax under section 194-IB shall furnish the certificate of deduction of tax at source in Form No.16C to the payee within 15 days from the due date for furnishing the challan-cum-statement in Form No. 26QC under rule 31A after generating and downloading the same from the web portal specified by the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) or the person authorised by him.