TDS on Rent [Section 194 I] –
Any person not being an individual or a HUF,
who is responsible for paying to a resident any income by way of rent, shall deduct income tax thereon @ of :-
(a) 2% on rent for the use of plant or machinery or equipment.
(b) 10% on rent for the use any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings).
at the time of credit of such income to the account of the payee or at the time of payment, whichever is earlier in cash or by cheque or draft or by any other mode.
[ There shall be no deduction if the aggregate of the amount of such income credited or paid or likely to be credited or paid during the financial year does not exceed Rs. 2,40,000/-].
Important Notes:-
Note 1:- This section is also applicable on individual or HUF whose total sales, gross receipts or turnover from the business or profession carried on by him [exceed one crore rupees in case of business or fifty lakh rupees in case of profession] during the financial year immediately preceding the financial year in which such income by way of rent is credited or paid.
Note 2:- No Deduction if income by way of rent is credited or paid to a business trust [REIT].
Meaning of Rent
Rent means:-any payment which falls under any lease, sub-lease, tenancy or any other agreement or arrangement for the 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,
As a matter of fact-
whether or not any or all of the above are owned by the payee.
additionally, where any income is credited to any account [Suspense account or by any other name] in the books of account of the person liable to pay such income such credit shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly.