Clarification on Sec 194-IB

Yes ypu should deduct TDS from each instament paid.

Hi,

Yes, you are required to deduct TDS.

As per section If multiple tenants are staying at the same place where rent paid by individual tenant does not exceed Rs 50,000, while the collective rent exceeds Rs 50,000 per month; in such case, the requirement to deduct the TDS is not applicable, provided relevant details of all tenants are available in the registered agreement with the owner. On the other hand, if the entire rent, exceeding Rs 50,000 per month, is collated and paid by a single tenant, then the deduction of TDS is required.

No you are not required to deduct TDS as 50000 limit mentioned in the section 194IB is for one individual.

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Thank you

Hi,

Hope you are doing well !!

Section 194-IB. (1)

Any person, being an individual or a Hindu undivided family (other than those referred to in the second proviso to section 194-I, responsible for paying "to a resident" any income by way of rent exceeding fifty thousand rupees for a month or part of a month during the previous year, shall deduct an amount equal to five per cent of such income as income-tax thereon.

So, you are not required to deduct TDS as the limit is for one indiviual.

Thanks & Regards,

Payal Chhajed

Yes, you are required to deduct TDS @ 5%. TDS is to be deducted at the end of each financial year or at the time vacating premises. You are also required to file form 26Q. If you need any further information plz let me know.

No need to Deduct TDS as the payment to individual pan is below threshold limit. The requirement to deduct TDS arises only when the amount payable exceeds the threshold limit of 50000

Good Afternoon,

As per Section 194IB, any Individual / HUF, whose aggregate turnover during the precceding financial year does not exceed limits specified u/s 44AB clause (a) & clause (b) {These limit is 1 Crore for Business and 50 Lakhs for profession}, will be required to deduct TDS on payment of rent to a resident individual if monthly rent is more than 50,000 Rs.

However, the threshold rent is to be seen taxpayer wise and not proprty wise. It does not matter if you are paying rent to two taxpayers for the same property. Since the payment of rent to each taxpayer is below 50,000 p.m. , you would not be liable to deduct TDS. If payment to any taxpayer (husband or wife) exceed 50,000 pm. threshold, you will have to deduct TDS on payment to that particular Taxpayer and not on Total rent paid. Since you are paying 42,500 to each Taxpayer, you will not be required to deduct TDS. 

Ps: I have used the word "Taxpayer" loosely which roughly translates to the word "Assessee" in the meaning of Income Tax.

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Yes, You are required to deduct TDS @5%.

The intent of the law is to dedct TDS on Rent payment of more than Rs. 50,000 irrespective of the manner of its payment. Also, while filling Form 26QC you have to mention of both the co-owners.

Hence, as your rent is more than Rs. 50,000 and ownership lies with more than one person, you cannot be exempted just by structuring payment of less than Rs. 50,000 to different accounts.

Following are the requirements that you need to take care about:

1.Tax is to be deducted from total annual rent paid to the resident landlord by the tenant.

2. Tax is to deducted once in the financial year at the end of the year or in the month when the premise is vacated / on termination of the agreement

3. Where the property is vacated during the year, the tax needs to be deducted on the last day of the tenancy.

4. Tenants do not need TAN

5. Payment is to be made by tenant using Form 26QC which is a challan cum statement within 30 days from the end of month in which deduction is made. For example if deduction is made in month of March then payment is to be made till 30th of April.

6. In case of single tenant and two landlords, two form is required to be filled for respective shares.

7. DS certificate is to be given by the tenant to landlord in Form 16C which is generated from the TRACES website. Such certificate is to be given to tenant within 15 days from the due date of submitting Form 26QC

8. Provisions of this section is applicable from 1st June 2017

Thanks

Ankit Bang

Hi,

You dont need to deduct tds as the rent paid to each person is below the threshold limit of INR 50k.

Regards,

Nikhil.

Hi,

- Section 194-IB is applicable to individuals whose books are not required to be audited u/s 44AB(a)/(b). If you fufill this condition then you are not required to deduct TDS upto Rs.50,000 per month rental of each co-owner. otherwise you need to deduct u/s 194-I.

Thanks

Hi

The limit of Rs. 50000 per month is per individual and hence you are not required to deduct TDS under section 194IB.

As the limit of Rs.50000 per month is for per individual and you are transferring Rs.42500 each to each co-owner then definately no tax liability as per Sec 194-IB

IN the case of ownership of property, it is usual practice that the contract is made jointly in the name of husband and wife. It is important to firstly understand whether the real income belongs to husband or wife. Is the purchase price of property shared by both or it is just that the husband owns the property ie he has paid the price and the agreement only includes name of wife for security perspective. Are their clubbing provision applicable while filing the return of income on rental income.  If the real income is shared between the two and earns less than 50,000 per month, then no need to deduct tax. If its husband who is the real owner, then entire tax should be deducted on gross rental paid in his name. However, do seek declaration from the husband and wife on the ownership of property and the taxability of rental income.  You may ask them to give form 15H/ 15G before deduction of taxes.