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TDS provisions on rent under Income Tax Act

Applicability of TDS on rent (194I)

  • Any person other than an individual or HUF who is responsible for paying rent to a resident for use of:any
    • land; or
    • Building (including factory building); or
    • Land appurtenant to a building (including factory building); or
    • Machinery; or
    • Plant; or
    • Equipment; or
    • Furniture; or
    • Fittings,

is required to deduct income tax under section 194I.

  • The threshold limit for deduction of TDS on rent is Rs 2,40,000. This means no deduction needs to be made if the total amount paid does not exceed Rs 2,40,000.

Rate of TDS on rent

Particulars

TDS Rate

Rent for use of plant, machinery, or equipment

2%

Rent for use of land, building, furniture, or fittings

10%

 

Time of deduction

TDS is to be deducted at the time of credit of rental income to the account of the payee or at the time of payment, whichever is earlier.


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CA Rupali Gupta

CA Rupali Gupta