How to Pay TDS on Rent of a Real Estate Property

The increased migrations to cities have created a huge demand for rental properties in India. Nowadays, many people are paying more than ₹ 50,000 per month on rent. Section 194-I of the Income-tax Act has made it mandatory for every individual or Hindu Undivided Family spending this amount on lease/rent to deduct the TDS on rent and pay it to the government. Well, a renter in India can pay the TDS online by visiting the NSDL website. But before that, it is important to procure a tax deduction number (TAN). Before paying the TDS on rent online, one should fill the Form 26QC. After this, by selecting the option for e-payment, one can make the payment successfully.

Here are some important rules regarding TDS deduction on rent of a residential property:

  1. The TDS on rent has to be deducted by a tenant from the owner of the property. And, it is his/her responsibility to pay this money to the government.
  2. The TDS applies to all rental properties that earn more the ₹ 2, 40,000 per financial year. 
  3. Tenants who are not subject to Tax Audits can deduct tax (TDS) at 5% of the rent. This rule is applicable only when they are paying more than ₹ 50,000 every month to a resident Indian Landlord. 
  4. The tenant needs to issue a TDS certificate in Form 16A within 15 days from the due date for filing eTDS returns. However, if the rent exceeds ₹5 lakh, then it has to obtain Form 15CB.

Conclusion: – With the above-mentioned information, you can easily pay TDS on rent to the government. Remember on failing to deduct tax from the landlord and paying it on time, you will attract a penalty or imprisonment varying from three months to seven years. 

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