What is the TDS On Society Maintenance Charges?

The TDS on society maintenance charges falls under Section 194C of the Income Tax Act. It is applicable when a housing society or Resident Welfare Association (RWA) makes payments for maintenance services such as security, housekeeping, plumbing, or electrical work. Usually, it is 2% as I also mentioned in my previous answer.

• These services are classified as “work” under Section 194C.

• TDS becomes mandatory if the aggregate payment exceeds Rs 30,000 in a single transaction or Rs 100,000 during the financial year.

• For payments to individuals or HUFs, TDS is deducted at 1%, while payments to others (e.g., companies or firms) attract 2%. 

• If the contractor does not provide a PAN, the TDS rate jumps to 20% per Section 206AA.

The timing for TDS deduction depends on whether the payer is the government or a society.

For non-government entities, TDS must be deducted when payment is credited or made, and the TDS amount deposited within 7 days of the month-end in which the payment is made.

The details for TDS on maintenance charges are as follows. As per Section 194C of the Income Tax Act, 1961, Tax Deducted at Source (TDS) applies to maintenance charges paid by housing societies or residential welfare associations (RWAs) if the aggregate payment exceeds Rs. 50,000 in a single transaction or Rs. 1 lakh annually to any contractor or service provider.

How Much is the TDS on Society Maintenance Charges?

TDS @ 1% (for individuals/HUFs) or 2% (for others) is deducted if the maintenance work is carried out by a contractor, plumber, electrician, or security agency. No TDS is required if the payee provides a PAN-based declaration and the payment is below the threshold.

If maintenance staff are hired as employees (not contractors), TDS under Section 192 (salaries) applies instead. The deducted TDS must be deposited via Challan 26QC and reported in Form 26Q quarterly.

Example: If a housing society pays Rs. 60,000 annually to a security agency, it must deduct Rs. 600 (1%) as TDS before payment.

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How to Claim TDS on Sale of Property in ITR

The TDS on society maintenance charges paid to a Resident Welfare Association (RWA) or housing society under specific conditions. Section 194C of the Income Tax Act, 1961 governs this. Let me tell you, TDS is applicable if the total annual payment to the society exceeds ₹30,000 for maintenance charges or ₹1,80,000 in aggregate for the financial year. Read on to know more.

TDS on Society Maintenance Rates

The applicable TDS rate is 1% or 2%, provided the payment is made to a resident society. If the society does not provide a valid PAN, the TDS rate increases to 20%.

• As far as I know, common area maintenance fees, security services, repairs, housekeeping, and other comparable services offered by society are among the payments covered.

• When making payments to society, compute TDS on the amount that exceeds the threshold and deduct it.

• The deducted TDS must be deposited with the government by the 7th of the following month.

• File quarterly TDS returns using Form 26Q, and issue a TDS certificate (Form 16A) to the society.

However, there are exemptions. TDS is not applicable if the society solely collects statutory dues like property tax or water charges without adding service charges. Non-residents are covered under different provisions (Section 195).

I hope you found this helpful.

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