What is the TDS rate for 194I?

TDS Rates under Section 194I

Type of Income TDS Rate
Rent of machinery, equipment or plant 2% TDS
Rent of land, furniture, fitting or building to HUF or individual 10% TDS
Rent of land, furniture or building to other than HUF or an individual 10% TDS

Is TDS applicable on rental income?

TDS @ 10% is required to be deducted in case the Rent paid/ payable during the Financial Year is more than Rs. Earlier, TDS on Rent was required to be deducted if the Rent paid was more than Rs. 1.8 Lakhs but w.e.f Financial Year 2019-20, this limit has been increased to Rs. 2.4 Lakhs per annum.

What is difference between 194I and 194IB?

We read above about Section 194I which only allows the Individuals / HUFs to pay the TDS who are audited under section 44AB. So, to bring out the individuals / HUFs who pay huge amount of rent but still are not audited, Section 194IB came to existence in Budget 2017.

What is 194I B in TDS?

Section 194IB of the Income Tax Act is a provision which is enacted to ensure that TDS or Tax Deducted at Source is withheld on rental payments. As per the Finance Act, 2017, “TDS on Rent” under Section194IB is liable to be deducted by Individuals or HUFs (Hindu Undivided Family).

How is TDS on rent calculated?

As per the 194-I section of Income Tax Act, 1961, a person (not being an Individual or HUF) who is responsible for paying of rent is liable to deduct 10% of the annual rent as tax deducted at source, if the annual rent exceeds Rs. 2.4 lakhs. Earlier, this TDS limit for deduction of tax on the rent was Rs. 1.8 lakhs.

What is the TDS limit for rent?

TDS threshold for deduction of tax on rent is Rs 2,40,000 for the FY 2020-21. The threshold limit was Rs. 1,80,000 until FY 2018-19. Also, individuals and/or HUFs who are subject to tax audit are also under an obligation to deduct the tax at source.

What is the section for TDS on rent?

The TDS on rent section is Section 194-I of the IT Act. The rent received from the renting out or subletting of property is subject to Tax Deduction at Source(TDS).

Who deducts TDS on rent?

As per Finance Act, 2017, “TDS on Rent” under section 194-IB is liable to be deducted by Individuals or HUFs (Hindu Undivided Family) (other than an individual or a HUF, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) …

When to deduct TDs on rent under Section 194?

Under Section 194-I, an individual who pays rent is liable to deduct TDS on rent when the total rent paid or likely to be paid in a specific financial year exceeds Rs. 2.4 lakh. a) Some other important facts related to TDS on rent limits and Section 194-I are as follows:

What is the TDs on rent in India?

Section 194I of the Income Tax Act defines the provisions related to the TDS on rent limits. It is primarily crucial for those Indian citizens who earn a rental income by renting or subletting their properties. The rent received is subject to deduction of TDS under Section 194-I, being an additional income for the property owners.

What is section 194i of the Income Tax Act?

What is Section 194I of the Income Tax Act? Section 194I of the income tax covers TDS on rent. It imposes obligation for TDS deduction on persons (other than individual/HUF) making rental payments to resident indians above a specified limit i.e. Rs.2,40,000 in a year.

Can a TD be deducted under section 194i?

TDS under section 194I shall apply even if the payee does not own the above mentioned assets. There is no TDS on refundable deposit like if the landlord collects security deposits which will be refunded at the time of vacating the building then on such payment no TDS to be deducted under section 194I.