Chapter 4 TDS Rates
Last updated at Sept. 22, 2020 by Teachoo
What is TDS under Section 194I If TDS @10% A B Bill of Rent Rs 100000 pm Cheque Rs 90000 TDS Deposit 10000 A B Cheque Rs 100,000 If No TDS Applicable Bill of Rent Rs 100000 pa It is applicable on TDS on Rent paid by Tenant to Landlord When is this TDS To be Deducted? It is deducted if Annual Rent More than 240000 Cutoff of Section 194I is 240000 p.a. Suppose A owns a Office which he gives on Rent to B Example teachoo.com TDS is Deducted By Tenant on Rent Paid to Landlord Rent Bill with GST Without GST A B Bill of Rent Rs 100000 pm Cheque Rs 90000 TDS Deposit 10000 TDS is Deducted on Amt Without GST This is Normally applicable For Residential Property Or if Landlord is Unregistered in GST Suppose A owns a Office which he gives on Rent to B Example teachoo.com With GST A B Bill of Rent Rs 1000000 +18% GST Cheque Rs 108000 TDS Deposit 10000 This is Normally applicable For Commercial Property if Landlord is Registered in GST TDS on Rent is Deducted if Rent paid is More than 240000 per annum On Which Amt 300000 or Excess 60000 ? TDS Deducted on Full 300000 Monthly Rent Annual Rent TDS Deducted 10000 20000 25000 120000 240000 300000 No No Yes What is Cutoff Under Section 194I Example Whether TDS Deducted on Following Rent But it is Deducted per month on 25000 Suppose TDS Rate is 10% TDS =25000*10%=2500 t eachoo.com No TDS upto 240000 per annum 240000 Rent paid 30000 pm. Agreement starts from 1 Feb Annual rent till 31 March 30000*2 60000 Rent paid 30000 pm. Agreement starts from 1 June Less than 240000 300000 No TDS More than 240000 If Total rent paid to 1 person 30000*10 = = = = TDS Deducted Rent paid 30000 pm. Agreement starts from 1 June in Name of Mr. and Mrs. A (Joint Property) 30000*10 300000 TDS to be deducted as more than 240000 If rent paid to both persons half half 15000*10 150000 No TDS as upto 240000 = = SECTION DESCRIPTION CUTOFF NORMAL RATES t eachoo.com TDS Cutoff Limit of 240000 p.a. to be Checked till March (Financial Year end) Property Taken on Rent During Year Normal Rates of TDS under Section 194I 10% or 2% Building and Furniture and Fittings Plant and Machinery What is Rate of TDS in Case of Office Taken on Rent Generator Taken on Rent Computers Taken on Rent Furniture on Rent 10% 10% 2% 2% Case Normal Change in TDS Rate Of Section 194I Due to Lockdown All TDS Rates Reduced by 25% If TDS Deducted between 14 May 2020 to 31 March 2021 Example 2 TDS on Rent of P&M is 2% Now it is reduced by 25% So it is 75% of 2% =1.5% Note Both Bill and Payment should be on or after 14 May 2020 to get lower TDS Rate Benefit t eachoo.com Example 1 TDS on Rent of Land and Building is 10% Now it is reduced by 25% So it is 75% of 10% =7.5% What is Rate of TDS in Case of Office Taken on Rent Generator Taken on Rent Computers Taken on Rent Furniture on Rent 10% 10% 2% 2% 7.5% 7.5% 1.5% 1.5% Case Normal Temporary t eachoo.com 194I RENT 10% Building, Furniture 2% Machine SECTION DESCRIPTION CUTOFF NORMAL RATES 240000 p.a TEMPORARY RATES 7.5% Building, Furniture 1.5% Machine Temporary Rates are applicable from 14 may 2020 to 31 Mar 2021 only After that Normal Rates will be applicable SUMMARY OF SECTION 194I RENT PAID FOR PERSONAL PURPOSE BUSINESS PURPORSE Company Partnership Proprietorship Section 194I Applicable 240000 cut off 240000 cut off Last Year Last Year Audit Case 240000 cut off No Audit Case Section 194I Not Applicable (Section 194IB may be applicable) Section 194I Applicable Section 194I Applicable t eachoo.com Section 194I Not Applicable (Section 194IB may be applicable) Whether Section 194I Applicable on All types of Rent Payments?