What is rate of TDS on rental payments of plant machinery or equipment?

What is rate of TDS on rental payments of plant machinery or equipment?

Tax (TDS) Deduction Rates Rent for plant/ equipment/ machinery- 2% TDS on the rent amount paid. Rent for land/ building/ furniture/ fittings- 10% TDS on the rent amount paid. Individual/ HUF not liable to tax audit – 5% TDS on the rent paid in cases where more than `50,000 is paid per month as rent.

Is TDS applicable on rental charges?

TDS @ 10% is required to be deducted in case the Rent paid/ payable during the Financial Year is more than Rs. 2.4 Lakhs. TDS on Rent in this case is required to be deducted under Section 194I @ 10% of the total amount paid or payable during the year. 2.4 Lakhs per annum.

What is difference between 194I and 194IB?

We read above about Section 194I which only allows the Individuals / HUFs to pay the TDS who are audited under section 44AB. So, to bring out the individuals / HUFs who pay huge amount of rent but still are not audited, Section 194IB came to existence in Budget 2017.

What is 194IB section of TDS?

What does Section 194IB specify? According to Section 194IB, it is mandatory for any person, i.e. individuals / HUF not liable to audit u/s 44AB, to deduct taxes for a rent paid to a resident, exceeding Rs 50,000 per month.

What is the TDS limit for machinery rent?

What is the Rate of TDS?

S. No Nature of Payment TDS rate from 14 May 2020 until 31 March 2021
1 Rent of plant and machinery 1.5%
2 Rent of land or building or furniture or fitting 7.5% (3.75% if rent exceeding Rs 50,000 / month is paid by individual/HUF who are not liable for tax audit)

Should TDS be deducted on rent?

Should You Deduct TDS on Rent? Currently, a person who is not an individual or a HUF is liable to deduct TDS on rent of more than Rs. 2.4 lakhs. In case you belong to the Individual or HUF category, you can deduct the TDS at 5% if the rent that you are giving exceeds Rs.

Who has to pay TDS on rent?

As per Finance Act, 2017, “TDS on Rent” under section 194-IB is liable to be deducted by Individuals or HUFs (Hindu Undivided Family) (other than an individual or a HUF, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) …

What is 194IA & 194IB?

TDS (Tax Deducted at Source), as the name suggests, this is a tax deducted at the source of certain income received by a person. In the case of Section 194IA and Section 194IB, TDS has to be deducted by the payer of the rent and the buyer of the property respectively.

What is 194I A?

What is Section 194I of the Income Tax Act? Under Section 194I a person (other than Individuals and Hindu Undivided Family) who is paying rent is liable for Tax deduction at source. The tax can be deducted at source when the total amount of rent to be received or paid in a particular financial year is more than Rs.

Who can claim TDS u/s 194IA?

Who is required to deduct TDS u/s 194IA? Any person (Buyer or Transferee) who enters into an agreement with a resident for transfer of immovable property (land or building or both but not an agricultural land) is required to deduct TDS under this section.

What is the exemption limit for TDS?

Items Liable for a TDS Deduction Section 192 – TDS on salaries: TDS on salaries is deducted at the rate of the income tax slab for the relevant year. For the assessment year, 2020-2021 the exemption limit for an individual is Rs 2,50,000.

Do you get TDs on rent of machinery?

TDS on Rent of machinery is covered under section 194I. As per this section if any rent is paid by a person (other than individual or HUF) for renting of any machinery or equipment or plant, TDS will be deducted.

Which is under TDs you / s 194i for rent?

The rent under this section broadly includes house rent, machine rent, building rent, office rent, furniture rent etc. This section was introduced to bring rent under the ambit of TDS provisions as rent is a substantial source of income in India, which was escaping the tax net. Who has the need to deduct TDS u/s 194I?

Who is liable for TDs on payment of rent?

We saw how section 194I:TDS on Payment of Rent by Certain Individuals or HUF makes only those Individual/HUF liable to TDS who are required to get accounts audited u/s 44AB.

Do you have to pay tax on TDs for hotel?

For hotel accommodation, where payment is made on regular basis, TDS is levied. Rates of tax deduction depends on the nature of payment and is given below: Tax is deducted at different rates for different assets such as factory, furniture, building, hotel etc.