Section - 194IB - Deduction of tax at source
in the case of certain Individuals and Hindu undivided family -
the existing law, tax is to be deducted at source from payment of rent if the
amount of rent exceeds Rs.1,80,000/- in a year. The provision is applicable
also to individuals or Hindu undivided Families who are liable for Tax Audit
under section 44AB. Individuals and HUFs who are not subjected to audit are
exempt from the obligation to deduct tax at source.
new section is sought to be inserted making individuals and HUFs not subject to
audit under section 44AB liable to deduct tax at source out of income by way of
rent if the amount of rent exceeds Rs.50000/- per month or part thereof. The
tax is to be deducted at the rate of 5% of the amount of rent.
also provided that such deduction shall be only once in the financial year and
will be made out of rent for the last month of the previous year or the last
month of the tenancy if the premises is vacated during the year. Where the tax
is to be deducted under section 206AA because of non furnishing of PAN by the
deductee, it is provided that the amount of tax to be deducted shall not exceed
the rent payable for the last month.
deductor in such cases shall not be required to obtain TAN.
will be effective from 1st June 2017.