Have you deducted TDS on the rent paid?
Tenants have to deduct TDS if the rent exceeds a certain limit. Shubham Agrawal & Vinay Dwivedi tell you how to go about it.
WHO SHOULD DEDUCT TAX 23.04.2018
Individuals and HUFs who are not required to get their financials audited and are paying rent of more than ₹50,000 per month have to deduct 5% of the rent paid in a financial year as tax.
WHEN TO DEDUCT TAX
Tax is to be deducted in March, the last month of the financial year. But if the property is being vacated before the end of the financial year, tax is to be deducted in the last month of the tenancy. The last date for March compliance without interest or penalty is 30 April.
TDS DEPOSIT DEADLINE AND FORM TO FILL
You have to pay tax online via Form 26QC which is a challan-cumpayment form within 30 days from the end of the month in which the tax is deducted. For instance, if tax is deducted in March, the last day to deposit the tax and file 26QC will be 30 April 2018.
HOW TO DEPOSIT THE TAX
The first step is to fill Form 26QC, available at www.tin-NSDL.com. You will have to furnish details such as your and the landlord’s PAN, email ID and phone number; address of the property, the amount of tax deducted, etc. There are options for filling multiple PAN in case the property is owned by several people or is leased by multiple tenants. Multiple Form 26QC will have to be filed if there are multiple landlords. After furnishing Form 26QC details, the ‘Etax payment immediately’ option will allow you to deposit the TDS with the taxman via Net banking, debit or credit cards. You can make the payments at a later date by opting for the ‘e-payment on subsequent date’ option. You may also visit any authorised bank’s branch to deposit the TDS once you have filled the Form 26QC. You are required to furnish the TDS certificate—Form 16C—to the landlord within 15 days of the last permissible date of filing Form 26QC. For instance, if you submit 26QC and deposit the tax on 30 April, then the last date of furnishing Form 16C to the landlord would be 15 May. Form 16C is available at www.tdscpc.gov.in and you can download it in 3-7 days after depositing the tax.
WHAT IF YOU DON’T COMPLY?
1. You may be liable to pay interest at the rate of 1% per month, if there is delay in deducting the tax. The penalty is 1.5% per month, if the tax has been deducted but there is delay in depositing it.
2. Delay in filing of Form 26QC may invite a late fee of ₹200 per day. For delay in issuing Form 16C, the penalty is ₹100 per day.
3. If Form 26QC is not filed before the one year from the due date, a penalty ranging from ₹10,000 to ₹1 lakh could be levied on you.
Tenants have to deduct TDS if the rent exceeds a certain limit. Shubham Agrawal & Vinay Dwivedi tell you how to go about it.
WHO SHOULD DEDUCT TAX 23.04.2018
Individuals and HUFs who are not required to get their financials audited and are paying rent of more than ₹50,000 per month have to deduct 5% of the rent paid in a financial year as tax.
WHEN TO DEDUCT TAX
Tax is to be deducted in March, the last month of the financial year. But if the property is being vacated before the end of the financial year, tax is to be deducted in the last month of the tenancy. The last date for March compliance without interest or penalty is 30 April.
TDS DEPOSIT DEADLINE AND FORM TO FILL
You have to pay tax online via Form 26QC which is a challan-cumpayment form within 30 days from the end of the month in which the tax is deducted. For instance, if tax is deducted in March, the last day to deposit the tax and file 26QC will be 30 April 2018.
HOW TO DEPOSIT THE TAX
The first step is to fill Form 26QC, available at www.tin-NSDL.com. You will have to furnish details such as your and the landlord’s PAN, email ID and phone number; address of the property, the amount of tax deducted, etc. There are options for filling multiple PAN in case the property is owned by several people or is leased by multiple tenants. Multiple Form 26QC will have to be filed if there are multiple landlords. After furnishing Form 26QC details, the ‘Etax payment immediately’ option will allow you to deposit the TDS with the taxman via Net banking, debit or credit cards. You can make the payments at a later date by opting for the ‘e-payment on subsequent date’ option. You may also visit any authorised bank’s branch to deposit the TDS once you have filled the Form 26QC. You are required to furnish the TDS certificate—Form 16C—to the landlord within 15 days of the last permissible date of filing Form 26QC. For instance, if you submit 26QC and deposit the tax on 30 April, then the last date of furnishing Form 16C to the landlord would be 15 May. Form 16C is available at www.tdscpc.gov.in and you can download it in 3-7 days after depositing the tax.
WHAT IF YOU DON’T COMPLY?
1. You may be liable to pay interest at the rate of 1% per month, if there is delay in deducting the tax. The penalty is 1.5% per month, if the tax has been deducted but there is delay in depositing it.
2. Delay in filing of Form 26QC may invite a late fee of ₹200 per day. For delay in issuing Form 16C, the penalty is ₹100 per day.
3. If Form 26QC is not filed before the one year from the due date, a penalty ranging from ₹10,000 to ₹1 lakh could be levied on you.
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