Income Tax Department reminds individuals, HUFs to deduct and deposit TDS on rent: How to do it

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Published: February 15, 2019 4:20:45 PM

The tax on total rent has to be deducted at the time of credit of rent for the last month of the financial year or the last month of tenancy, if the property is vacated during the year.

income tax, tax deducted at source, TDS, TDS on rent, tenant, landlord, Income Tax Department, how to deduct and deposit TDS on rent, PAN, NSDL site, Form 16C, 26AS, Section 194IB, Form 26QCTo facilitate the process, the I-T Department has also asked the landlords to provide PAN to the tenants.

As the 2018-19 financial year is nearing its end, the Income Tax Department has reminded individuals and Hindu Undivided Families (HUFs), who pay a rent of more than Rs 50,000 per month (or part of month), to deduct tax at source at the rate of 5 per cent on rental payments on immoveable property, according to the provisions of newly-introduced Section 194-IB to the Income-Tax Act, 1961, which was proposed in the Union Budget 2017.

However, for the assessees, whose incomes are liable to audit under clause (a) and (b) of section 44AB of the I-T Act, this provision is not applicable.

The tax on total rent has to be deducted at the time of credit of rent for the last month of the financial year or the last month of tenancy, if the property is vacated during the year.

To deduct and deposit TDS, tenants have to take the PAN of respective landlords and upload details of TDS along with correct PAN in Form No. 26QC, which is available on the NSDL www.site tin-nsdl.com, after deducting the tax from the rent of March 2019, if not already deducted. For uploading the details on NSDL site, tenants need not obtain TAN.

In order to deposit the TDS amount to the I-T Department online, tenants need to visit www.tin-nsdl.com/services/oltas/oltas-bank-branches.html and pay the amount either through Net Banking or through Debit Card. Taxes may also be deposited at authorised bank branches.

Detailed procedure, list of bank branches authorised to accept TDS are available on the NSDL site, along with answers to frequently asked questions (FAQs) in this regard.

Once the details of TDS are uploaded and the amount is deposited, the tenant has to download the TDS certificate in Form No. 16C from TRACES website (www.tdscpc.gov.in) and issue it to the landlord.

To facilitate the process, the I-T Department has also asked the landlords to provide PAN to the tenants. After the TDS is cut from the rent of the last month of the financial year or before, landlords should verify if the tax is deposited to the I-T Department from Form No. 26AS and should also insist the tenant to give Form16C to them.

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