Budget 2017
proposed to imposed TDS deduction liability on individual or a HUF (other than
those liable for tax audit) for paying to a resident any income by way of rent
exceeding fifty thousand rupees for a month or part of month during the
previous year , shall deduct an amount equal to five per cent. of such income
as income-tax thereon.
New Section
194-IB inserted
Ø Applicable: - Individual or an HUF for rent payment exceeding
Rs. 50,000 for a month or a part of month during the previous year.
Ø Rate of TDS :- 5%
Ø Deduction of tax :- at the time of credit of rent, for the last
month of the previous year or the last month of tenancy if the property is
vacated during the year, as the case may be, to the account of the payee or at
the time of payment thereof in cash or by issue of a cheque or draft or by any
other mode, whichever is earlier.
Ø It is further proposed that the deductor shall not be required
to obtain tax deduction account number (TAN) as per section 203A of the Act.
Ø It is also proposed that the deductor shall be liable to deduct
tax only once in a previous year.
Ø It is also proposed to provide that where the tax is required to
be deducted as per the provisions of section 206AA(where PAN number of the
deductee not furnished i.e at a rate of 20%), such deduction shall not exceed
the amount of rent payable for the last month of the previous year or the last
month of the tenancy, as the case may be.
Salaried employee who are claiming HRA
and showing payment of rent of more than Rs. 50,000/- per month have to
compulsory deduct TDS of 5%.
The amendment will be effective from 1st June 2017.
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