Let’s discuss more about the form 16C and challan 26QC for deducting the TDS on rent. To draw a higher rental income group under the tax, the government budget 2017 has incorporated a new section 194IB.
Provision, the person and HUFs who are responsible for paying the rent to a resident exceeding 50k for a month or part of a month shall need to deduct TDS at the rate of 5%. from 1st June 2017. from the date 1st June 2017 when the section gets into force. However, the TDS rate changed to 2% applicable from 01.10.2024.
194-IB. (1) Where an Individual or HUF paying to a resident any income by way of rent exceeding 50K rupees for a month or part of a month during the previous year, shall deduct 5% of such income as income tax.
(2) TDS shall be deducted at the time of credit of rent, for the last month of the previous year or the last month of the tenancy to the account of the payee or at the time of payment, whichever is earlier.,
Such amount of deduction shall not exceed the amount of rent payable for the last month of the previous year or the last month of the tenancy where the tax is deducted as per section 206AA.
As per this provision, any individual is liable to deduct TDS @ 5% if the rent paid exceeds Rs 50,000 per month.
TDS Deduction Time
Once in the fiscal year, the TDS is needed to be deducted. It could be either deducted during the time of the credit of the rent to the payee account (landlord) towards the last month of the fiscal year or the last month of the tenancy if the property is not filled for the complete year. During the time of payment, the same can also get deducted, whichever is earlier. If you are searching for tools regarding challan-cum-statement 26QC payment under TDS your search ends here. Now you can submit challan 26QC payment via Gen TDS Software without any error.
Submit Query Regarding TDS Challan 26QC Software
Payment of TDS Submission
Within 30 days, the TDS deducted must be furnished from the end of the month where the tax was deducted. It will be attached with the challan (cum) statement in 26QC form under TDS. The TDS deducted could be furnished to the government via the electronic method through the Reserve Bank of India, State Bank of India, or any other approved bank.
Certificate Form 16C for TDS Deduction to Payee Furnishing
Form 16C is an innovative TDS certificate made through the government of India. It shows how much TDS in amount was deducted from rent at the rate of 5 % via individual or HUF (u/s 194IB). It is similar to Form 16 or Form 16A provided in the circumstances of salary along with the additional payments.
Read Also: Generate Challan Form 26QB by Gen TDS Return Software
Form 16C to the payee is needed to get filed in 15 days by the individual whose TDS is deducted upon the rent from the last date of filing the challan cum statement in 26QC Form.
For Example: Vijay, who is a salaried employee is said to furnish the rent of Rs 60,000 per month. A 5% TDS is deducted for the complete year in March. Rs 36,000 (5%*7,20,000) is the amount of TDS that is deducted.
Now, this TDS must be deposited adjacent to Form 26QC before 30th April, that is 30 days from the finish of the month in which TDS gets deducted. Indeed, Vijay must file Form 16C to the landlord before 15th May, i.e. 15 days from the last date of filing the challan cum statement in Form 26QC.
