Cut 5% TDS on monthly rent of Rs 50,000

If you are an individual paying a rent of over Rs 50,000 per month, you are required to cut a 5% tax deducted at source (TDS) as per a new law implemented from June 1st.

The relevant section in the Income Tax (I-T) Act - section 194-IB - was introduced by the Finance Act, 2017, having widened the scope of withholding tax by making individuals cut TDS on monthly rental payments above Rs 50000.

Given that rents in Indian metro cities are sky-high, several tenants would fall under the bracket of people needing to oblige withholding taxes, depositing it with the government and doing the necessary paperwork.

However, when it comes to this paperwork and documentation, these formalities have been made easier by the government. TDS is required to be paid within 30 days from the end of the month in which the deduction was made, and can be remitted electronically to the RBI or SBI or any authorised bank using form 26QC (which serves as a challan-cum-TDS) through the NSDL portal. The portal also provides form 16C, which has to be downloaded and given to the landlord within 15 days from the due date of filing form no 26QC.