Tax Deducted at Source, or TDS, is a government tool that is used to collect tax and minimise tax evasion by taxing income when it is generated without any delay. It is levied on various incomes like salary, interest received, commission received, rent, and more. I had no idea about TDS on commercial property rent until I saw my landlord discussing it with my husband. The TDS amount on the commercial property varies, so he had to decide and pay accordingly. Since I have a brief understanding of it, let me help you with the query, what is TDS rate on rent of commercial property.
Is TDS applicable for commercial property?
TDS is applicable to all properties, be they residential, commercial, or even industrial. In fact, TDS is levied on plots as well, except agricultural lands.
What is the TDS on rent of commercial property?
TDS is to be deducted at the time of crediting/paying the income by way of rent to the payee account through netbanking/ debit or credit card, and more. Here is the rate of TDS-
| Type of Rent | Amount to be paid |
Rent for plant/ equipment/ machinery |
2% TDS on the rent amount paid |
Rent for land/ building/ furniture/ fittings |
10% TDS on the rent amount paid |
Individual/ and HUFs (Hindu Undivided Families) are not liable to tax audits. |
5% TDS on the rent paid in cases where more than Rs. 50,000 is paid per month as rent. |
There is no surcharge applied on the TDS on rent except if there is any involvement of a foreign company and the payment is above Rs. 1 crore.
The PAN number of the landlord is to be given to the payee for TDS deduction. If it is not provided, the TDS on rent is to be deducted at 20% under Section 206AA.
The TDS on rent does not charge any Education Cess or Secondary and Higher Education Cess.
So this is the TDS on commercial property rent that is to be paid.
Seek NoBroker’s trustworthy legal advice for every doubt
Read More:How to calculate TDS on rent with example
How to pay TDS on rent online?
When is TDS deducted on rent?
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What is TDS Rate on Rent of Commercial Property?
Hari
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2023-05-23T10:06:09+00:00 2023-05-23T11:14:38+00:00Comment
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