Unknown facts about TDS on Rent

April 26, 2018 Finance Talk Valli Sarvani No comments

Do you know that TDS is applicable on the rent you pay if that amount exceeds ₹50,000 per month? When did this rule come into force?

Here are some unknown facts about TDS on rent:

From June 1^st, 2018 all individuals have to deduct a TDS if their rent exceeds ₹50,000 per month at the rate of 5 per cent.
Earlier, only those individuals or HUFs that needed to conduct a tax audit had to deduct a 10 percent TDS.
This came into force for the large amount of rental income to be disclosed to the income tax department.
Earlier, TAN (Tax Deduction and Collection Account Number) was required for the deduction of TDS as tax audit was essential. But, now, TAN is not essential as there is no need of tax audit requirement.
The landlord can also take the credit benefit of TDS on the total payable tax while filing returns which needs to be filed once in a year.
The TDS will be deducted in the month of March and the last date to comply with the TDS requirement without penalty is April 30.
That means you have to submit your form within the date. You have to file the TDS for the last month of your tenancy if you vacate the house in the middle of the year.
You have to deduct the TDS on the rent in the month of March of financial year or the last month of your tenancy whichever is earlier.
Then file and submit 26QC with all the details. In the form, you have to fill all the details of landlord including PAN, email ID, phone number, the address of house which was given for rent, the applicable TDS etc.
If the property is jointly owned, you have fill the details of all the owners.
You can use your debit or credit card, or net banking for paying the tax.
After 3 to 7 days of filing your TDS, you have to get a Form16C. This is your TDS certificate which needs to be furnished within 15 days of depositing the TDS. The late issuance of Form 16C would attract a penalty of ₹100 per month.
If you do not deduct the TDS, you have to pay 1 per cent interest per each delayed month. If the money is deducted, but not deposited, you have to pay 1.5 per cent.
Furthermore, ₹200 is levied per day for late submission of form 26QC. If you do not file the form for a year, you have to bear a penalty ranging from ₹10,000 to ₹1 lakh.