Section 194I is all about TDS on payments made in respect of Rent.
Who is liable to deduct TDS on Rent payments? 1.Any person (other than Individual or HUF) who pays rent to any Resident person is required to deduct tax at Source 2.Any Individual or HUF is required to deduct tax at source on Rent payments if the turnover of the individual or HUF is Rs.1 Crore or more in case of business and Rs.50 lacs or more in case of Profession during the preceeding previous year. What is the limit above which TDS on Rent is applicable? TDS on Rent payments is required to be deducted if the total rent payment during the Financial year is Rs.240000/- or above. Thus there is no requirement of TDS if the yearly rent is less than or equal to Rs.240000/-. What is the Rate of TDS on Rent? The TDS rate on Rent is as under : 1. 2% for the use of any machinery or plant or equipment ;
2. 10% for the use of any land, building, furniture or fixtures (including factory building) What is the definition of Rent?
As per Section 194I, Rent means any payment made for lease, sub-lease, tenancy or any other agreement or arrangement for the use of :
(a) Land, building (including factory building) (b) land appurtenant to a building (including factory building) (c) machinery, plant or equipment (d) Furniture or fittings
For the above purpose, it is not necessary that the same should be owned by the payee.
