New provision mandating payment of TDS on rent above Rs. 50,000/-.

The Central Board of Direct Taxes (CBDT) today notified the amended rules in connection with the new provision mandating payment of TDS on rent above Rs. 50,000/=. Finance Act, 2017 inserted a new provision, Section 194IB in the Income Tax Act as per which, Individuals and HUFs paying rent of Rs 50,000 or more per month must deduct 5% tax at source. The provision is applicable w.e.f 01.06.2017. As per the new provision, TDS is deductible at the rate of 5% of the rent paid or payable. If the person receiving rent doesn’t furnish his PAN then TDS is deductible at the rate of 20% subject to maximum limit of amount of rent payable for the month of March or last month of tenancy as the case may be. In connection with the above provision, the Board has now, amended the income Tax Rules. Form nos. 16C and 26QC also has been released in this regard.

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