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Rashmin Sanghvi & Associates

Chartered Accountants

220, 2nd Floor, Arun Chambers,
Tardeo Road,
Mumbai - 400 034,
Maharashtra, India.

Tel. Nos.: (+91 22) 2351 1878, 2352 5694.

Fax : (+91 22) 2351 5275.

Email : [email protected]

Home Articles Taxation         Share :

Budget 2017Chapter H

38. Deduction of tax at source from rent payments in case of Individuals and HUFs [S.194-I]:

38.1 Individuals and HUFs who are liable to tax audit u/s. 44AB are required to deduct tax at source on rent u/s. 194-I. However assessees who were not liable to tax audit were not required to withhold this tax.

38.2 Finance Act 2017 proposes to widen the scope of deduction of tax at source. Therefore, individuals and HUFs paying rent exceeding Rs. 50,000 for a month or part thereof are required to deduct tax at source @ 5%.

38.3 Such tax shall be required to be deducted at the time of payment of rent for the last month of the previous year or last month of tenancy if property is vacated during the year.

38.4 If the lessor does not have a Permanent Account Number (PAN) then tax shall be withheld @ 20% as per Section 206AA. However, the amount of tax to be withheld shall not exceed the amount of rent payable for the last month of the previous year or the last month of the tenancy.

38.5 Further, for the purposes of deducting tax at source such individuals will not be required to obtain Tax deduction Account Number (TAN).