Rent received by a landlord is subject to tax deduction at the source. Let me tell you about the TDS rate on rent. The Income Tax Act’s Section 194I provisions allow a duty on the rent payer to deduct tax at the rate of 10 percent of the rent on any building or land, in case the total rent paid or likely to be paid during the year is more than Rs.240000.
I want you to know that this limit of Rs. 240000 applies to each payee and not for each property.
So, if the property owner has rented out more than 1 property to the same tenant and the annual rent whereof, is less than Rs.240000 for each property annually but the total rent for all the properties taken on rent from the same person exceeds Rs.240000, then, the tenant has to deduct the tax at source.
Current TDS Rate on Rent in 2021In May 2020, the finance minister announced a reduction in the TDS Rate for non-salaried payments, after which the CBDT reported revised rates that would be applied from 14-05-2020 to 31-03-2021. Under the latest rules, the tax deducted on payment of professional fees, rent, insurance policy, dividend, and on the acquisition of immovable property, was cut by 25 percent till 31-03-2021. TDS on rent for immovable properties came down to 7.5 percent from the 10 percent before, for this brief period, due to the covid pandemic.
Also, a tenant would’ve to make the TDS deduction on rent for more than Rs.50000 monthly at 3.75 percent, which was 5 percent before. Even though taxpayers thought this measure would be extended in the 2021-2022 Budget, but the finance minister didn’t make an announcement for the same when the Union Budget was announced on 01-02-2021.
Learn what is TDS and How it is Calculated
Check out what is the percentage of TDS on rent
Find out what is the TDS limit for rent
How to calculate TDS on rent with example
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What is the TDS rate on rent?
Kartik
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2021-09-23T12:52:44+00:00 2021-09-23T19:13:57+00:00Comment
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