TDS from Rent: Easy Steps to Deduct TDS on Rent

Rent means any payment made to owner of land, building, machinery and plant using it for your own purpose up to the time specified in the rent agreement, lease agreement or any other agreement or arrangement. In this article, we will discuss all detail provisions for deducting tax (TDS) from rent. As you all know recent amendments made it very complicated for laymen. So you should read the complete article to know the step by step procedure for TDS on rent. 

Person Liable to deduct Tax: The payer and if the is a company, including the principal officer thereof, except individual and HUF who were not covered u/s 44AB(a) or 44AB(b) in the preceding previous year.

Exemption Limit: Exceeds Rs. 1, 80,000 (Rs. 1, 20,000 up to 30-6-2010) in a financial year.

Time of deduction of TDS: At the time of payment of credit whichever is earlier.

Where income is credited to any account, whether called suspense account or by any other name in the books of accounts of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee.

Time limit for deposit of TDS:

Where tax is deducted by the office of the Government:

• On the same day where the tax is paid without production of an income-tax challan; and
• On or before seven days from the end of the month in which the deduction is made, where tax is paid accompanied by an income-tax challan.

In any other case,

• On or before 30^th day of April, where the income or amount is credited or paid in the month of March; and
• In any case, on or before seven days from the end of the month in which the deduction is made.

Time limit for issue of certificate of TDS and Form: You have to furnish form 16A within 15 days from the due date of submitting the TDS return/statement. In other words certificate of TDS in Form 16A is to be issued quarterly on or before 30^th July, 30^th October, 30^th January and 30^th May. However, in case of a deductor being office of the Government, certificate shall be issued quarterly on or before 15^th August, 15^th November, 15^th February and 30^th May.

TDS Returns/Statement on Rent: In Form No. 26Q on or before 15^th July, 15^th October and 15the January for the first three quarters and on or before 15^th May for the last quarter. However, in case of a deductor, being office of the Government, the due date shall be on or before 31^st July, 31^st October and 31^st January for the first three quarters and on or before 15^th May for the last quarter.

Annual tax statement under section 203AA: In Form No. 26AS to be prepared and delivered by the Principal Director General or Director General of Income Tax (Systems) or a person authorized by him to the deductee by 31^st July following the financial year during which taxes were deducted or paid.

Can AO’s certificate for deduction at lower rate or non-deduction be obtained? (Section 197):  Yes, if application is made in Form No. 13. Appropriate certificate may be issued by Assessing Officer, if necessary. Certificate shall not be granted if the applicant if the applicant does not provide his permanent account number.