If a person pays more than Rs 50,000 as house rent every month, then he has to deduct 2% TDS as per the Income Tax rules. Earlier, 5% TDS had to be deducted. But, from October last year, it was reduced to 2%
If you are paying house rent of more than Rs 50,000 every month, then you have to deduct TDS. If you are paying rent to the landlord without deducting TDS, then you may get a notice from the Income Tax Department. Actually, the Income Tax Department has sent notices to many taxpayers for not following this rule. These notices have been sent for the financial year 2023 and 2024-25. The notice states that taxpayers have claimed HRA, but have not deducted TDS on rent. It is said that notices have been sent to a large number of such taxpayers.
What does the income tax rule say?
Tax experts say that if a person pays more than Rs 50,000 as house rent every month, then he has to deduct 2% TDS as per the income tax rules . Earlier , 5% TDS had to be deducted. But, from October last year, it was reduced to 2%. Income tax rules say that the responsibility of deducting TDS on rent is on the tenant. The tenant has to deduct TDS and then pay the remaining rent to the landlord. It is the responsibility of the tenant to deposit the TDS money with the income tax department.
What will happen if TDS is not deducted?
If the tenant pays rent to the landlord without deducting TDS, it will be considered a violation of the rules. For this, the Income Tax Department can impose penalty and interest on him. The Income Tax Department has issued a new brochure in this regard. It explains the responsibility of the tenant regarding TDS. Section 194-1B of the Income Tax Act, 1961 states that along with the building, the rent of land also comes under the purview of TDS rules.
By when should TDS money be deposited?
It is necessary to deposit the TDS money with the government within 30 days from the date on which the tenant has paid the house rent. If the tenant does not follow this deadline, then he will have to pay a late filing fee of Rs 200 per day. A penalty of up to Rs 1 lakh may also have to be paid under section 271H for not filing TDS return. Apart from this, the Income Tax Department will recover the entire amount of TDS not deducted from the tenant.
