Income Tax

TDS on Housing Rent

CA Adityavikram Banka

TDS on Housing Rent

Applicability of TDS payment u/s 194IB & u/s 195 of the Income Tax Act in the case of housing rent payments to landlords is as bellow :

A) Section 194IB – Resident Landlord:

1. This section is applicable to rent paid to a resident landlord of more than Rs. 50,000 per month.

2. The tenant deducts TDS at 5%of the rent. If the landlord doesn’t provide their PAN, the deduction rate increases to 20%.

3. The tenant deposits the deducted TDS using Challan-cum-statement in Form 26QC. The tenant issues a TDS certificate in Form 16C to the landlord.

B) Section 195 – Non-Resident Landlord:

1. This section is applicable to rent paid to a Non-Resident Indian landlord.

2. There’s no minimum threshold for rent amount.

3. The deduction rate depends on the applicable tax rate for NRIs (usually 30% plus Education Cess 4%) or any beneficial tax treaty rate between India and the NRI’s country of residence.

4. The tenant deposits the deducted TDS monthly and files quarterly TDS Return using Form 27Q.

5. Under Section 195, the tenant issues a TDS certificate in Form 16A to the NRI landlord.

The onus is on the tenant to deduct and pay the requisite TDS amount.

CA Adityavikram Banka
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