#TDS on rent of property

[sanjanagoyal]

TDS on Rent Payment: How to Calculate and Deduct Tax on Rent Paid?

What is TDS?

The TDS concept was introduced to collect tax from the source of income itself. According to this idea, a person (the deductor) who must pay another person (the deductee) a specified payment type must withhold tax at source and remit it to the Central Government. The deductee from whose income tax was withheld at source would be entitled to receive credit for the amount withheld based on Form 26AS or a TDS certificate issued by the withholding agent.

TDS Rate Applicable on Rent

The person who must pay TDS on rent payment must deduct tax at source (i.e., not an individual or HUF). TDS on rent limit for FY 2022-23 is Rs. 2, 40,000.

An organization might pay Rs. 90,000 per month to rent an office, for instance. Since the annual rent exceeds the cap, after a 7.5% tax is deducted, each month, the owner receives a credit of Rs. 83,250. It is necessary to pay the government the remaining sum.

How is TDS on Rent Calculated?

The amount owed must be calculated to determine if a rent payment is subject to TDSon rent paid by the individual. The payee is required to figure out the TDS rate for rent and reduce the amount of the annual amount exceeding Rs. 2,40,000.

Akshar Enterprises, for example, makes monthly payments of Rs. 35,000 for equipment. They are increased to Rs. 4,20,000 per years in rent. The payee must therefore deduct Rs. 525 ($1.5%) or 1.5% TDS on rental income.

The payer is responsible for making TDS on rent deductions. If they don't, they must pay interest starting on the day the tax is deductible and continuing until the tax is deducted at a rate of 1% each month. The payer must pay interest at a rate of 1.5% per month from the day the tax is deducted until the day it is deposited if they reduce the TDS on the rent amount but fail to remit it to the government.

How to make a TDS Payment?

Visit the NSDL website to start the e-filing process.

 In the TDS/TCS area, choose "CHALLAN NO./ITNS 281". Your browser will take you to the e-payment page.

Enter the following information on this page.

● If you deducted TDS while paying a firm, choose "Company Deductees" under "Tax Applicable." Otherwise, choose "non-Company Deductees."

● Type in the assessment year and TAN for which the Payment is being made.

● Type the "Pin Code" and choose the "State" option from the drop-down menu.

● Decide whether to pay for TDS on rent deducted and paid by you or TDS assessed regularly.

● Select "Nature of Payment" and "Mode of Payment" from the drop-down menu.

● Push the "Submit" button.

After submission, a confirmation screen will appear. The confirmation screen will show the taxpayer's complete name as it appears in the master document if the TAN is valid.

After the data you entered has been confirmed, you will be taken to your bank's net banking website.

After logging in to the net banking website with the user's name and password provided by the bank, the taxpayer should proceed to complete the Payment.

When an electronic payment is made successfully, a challan counterfoil with the CIN, payment information, and bank name is presented. This counterfoil is evidence of the transaction's Payment. You must file your TDS return after making the TDS payment.

[jjtax]

Top Reasons Why You Can Get an Income Tax Notice

Learn about common reasons and the steps you can take when issued an income tax notice.

There’s a chance you may receive a written message from the Income Tax Department informing you of some discrepancy in your tax account. This is an Income Tax Notice. There can be several reasons for receiving such a notice, but understanding the errors and taking quick steps will be your best course of action. Let’s dive into the common reasons why you can get an income tax notice.

1. Errors in Income Tax Return (ITR)

When inconsistencies are found in your ITR, such as underreported or unreported income sources, the tax authority will issue a notice. Ensure that all your income sources are accurately reported with supporting documents like salary slips, bank statements, rent agreements, and property documents.

2. Unreported High-Value Transactions

High-value transactions often trigger scrutiny. If you don’t report these transactions, you may receive a notice. Common high-value transactions include:

Cash deposits/withdrawals exceeding ₹50 lakh in a year in your current account.

Cash deposits exceeding ₹10 lakh in your savings account.

Cash receipts from the sale of goods/services over ₹2 lakh.

Credit card payments over ₹1 lakh in cash or ₹10 lakh through any mode.

Transactions in immovable property exceeding ₹30 lakh.

3. Non-Filing of Income Tax Return

Not filing your ITR on time, especially if your income is taxable, will result in a notice. The notice is typically a reminder, and failure to comply can result in penalties. Even if you miss the deadline, you can file an updated return within a specified timeframe.

4. Non-Payment of Tax on Interest Income

Interest income is taxable and must be reported. If you fail to do so, the tax authorities will notice. They track interest income credited to your bank account or reinvested in assets.

5. TDS Discrepancies

Discrepancies between TDS as per Form 26AS and the income declared in your return can result in a notice. You can rectify these errors by filing a rectification request or a revised return.

6. False Claims

Claiming false deductions or making bogus claims in your ITR can land you in trouble. Common examples include:

Fake rent receipts to claim higher HRA exemption.

Unsupported deductions under Chapter VI-A.

Deductions for ineligible expenses.

7. Scrutiny by the Income Tax Department

Sometimes, taxpayers are randomly selected for scrutiny. In this case, the tax authorities will request additional documents. This is just a routine check, and it’s important to respond promptly and provide the necessary details.

Things To Do After Receiving an Income Tax Notice

Getting an income tax notice can be unsettling, but staying calm and organized is crucial. Here’s what you should do:

Study the Notice: Understand why it has been sent and prepare the requested documents.

Note the Deadline: Ensure you respond within the timeframe to avoid penalties.

Collect Necessary Documents: Gather all relevant financial records to respond to the notice.

Ask for Help: Consulting a tax expert, such as those at JJ Tax, can help you understand the notice and the next steps.

Save Copies: Keep a record of all communications and documents submitted to the authorities.

Review Your Tax Return: Use the notice as an opportunity to review your returns and correct any errors by filing an amended return if necessary.

Stay Organized: Save all related communication, including the original notice, responses, and other documents.

Follow Up if Needed: If you have questions or need closure on the issue, don’t hesitate to follow up with the authorities.

Wrapping Up

Receiving an income tax notice is not something to fear, but it's important to know what to expect. Seeking professional help can expedite the process. Reach out to JJ TAX—our team is here to help with income tax notices, answering your queries, and offering swift legal or tax solutions. Call us today! Download JJ TAX APP

[acquisory]

Finance Act 2017 – An Overview

The Finance Bill, 2017 which was introduced in the Lok Sabha on 1st February, 2017 which has now been made Finance Act 2017 w.e.f. 1st April, 2017 after receiving the assent of the President of India on 31st March, 2017.

Major changes in the Finance Act, 2017

Income Tax Rate for the AY 2018–19 (FY 2017–18)

For individual tax payer the new slab of surcharge of 10% for Total Income of Rs. 50 Lacs to Rs. 100 Lacs has been introduced. Whereas for the income exceeding Rs. 100 Lacs, the surcharge shall be 15% of total income. Presently a tax rebate of Rs. 5000/- is allowed if the total income does not exceed Rs. 5,00,000/-. With effect from 01/04/2017, the limit has been reduced to Rs. 2500/- up to the total income of Rs. 3,50,000/-.

In case of companies, where the total turnover or gross receipt does not exceed Rs. 50 Crore during FY 2015–16, the tax rate would be 25% for FY 2017–18.

Applicability of Tax Deducted at Source (TDS) Rate for FY 2017–18

The Finance Act, 2017 now specifies that every individual/HUF, not covered by Tax Audit Provisions, shall be liable to deduct TDS at the rate of 5%, if the monthly rent exceeds Rs. 50,000/- per month as compared to the earlier provision wherein the individual/HUF who comes under the tax audit provision (Turnover exceeding Rs. 1 Crore) were liable to deduct TDS on rent (whether used for business or residence) if the total rent exceeds Rs. 1,80,000/- per annum.

Provisions w.r.t Capital Gains

Holding Period of Capital Asset:

The Finance Act has reduced the holding period of Land/Building to 24 months. For various other assets such as All listed Shares, Units of Equity Oriented Mutual Funds and Securities the holding period has been reduced to 12 months and for any other type of capital asset including units or Debt Oriented Mutual Fund the period has been reduced to 36 months.

Exemption on Sale of Long Term Capital Gain on Equity Shares

With the Finance Act, 2017 coming into force one of the major amendment that has been made is w.r.t. exemption provided on Sale of Long Term Capital on Equity Shares (after paying Securities Transaction Tax STT) which shall be subject to the following conditions –

- The shares should have been purchased after paying STT if these were acquired after 01/10/2004.

- However, the above mentioned condition would not be applicable if the acquisition is out of IPO, Follow-on IPO, Right Issue or Bonus issue for which separate notification would be issued by Government.

Applicability of Joint Development Agreement on Land/Building owned by Individual/HUF

The Finance Act has tried to curb the problems faced by the owner’s w.r.t. Capital Gain liability which is triggered as soon as the Joint Development Agreement (JDA) is entered and possession of the property is handed over for development to developer, though the sale of the developed property which might take several years. Thus, to address such problems, new provisions under section 45 (5A) has been inserted in Income Tax Act, 1961 which lays down the following conditions-

a) There should be a registered agreement between the owner of the Land or Building or both and developer, to develop the real estate in consideration of land or building or both or part in cash.

b) Capital gain shall be chargeable to tax as income of the previous year in which the certificate of completion for the whole or part of the project is issued by the Competent For this purpose, the stamp duty value shall be the value on the date of issuing the completion certificate.

Shifting of Base Year for Computation of Capital Gains

The Finance Act, 2017 has provided the option to assessee to substitute the fair market value (FMV) as on 01/04/2001 in case of of asset acquired prior to 01/04/2001. Earlier this date was 01/04/1981.

Capital Gain applicability for Unquoted Share

With the introduction of new Section 50CA w.e.f. 1st April, 2017, the Fair Market Value (FMV) would be deemed to be the full value of consideration if actual sale consideration is less than the FMV on the date of sale of shares. Thus, the both seller and buyers would have to pay tax on the difference if the FMV is higher than the actual consideration.

Tax Provisions on Acquisition of Asset without consideration or inadequate consideration by firms/Association of Persons (AOP) and widely held companies

Until the present tax norms, firms, AOP and widely held companies were not liable to tax on difference between Fair Market Value (FMV) and actual consideration.

The recent Finance Act, 2017 now provides that firms/AOPs and widely held companies to pay tax under section 56(2) on the difference if the Fair Market Value is higher than actual consideration of movable or immovable asset. However trusts, transactions between relatives, HUF partition etc. are still out and not liable to pay the tax on the difference amount.

Setting off of Interest on Housing Loan on Rented Properties

The present tax structure allows the setting off of interest on housing loans in respect of let out properties against other income without any limit. With the Finance Act, 2017 in place, the loss under the `Income from House Property’ would be kept limited to Rs. 2,00,000/- for adjustment against…

Read More: https://www.acquisory.com/ArticleDetails/35/Finance-Act-2017-%E2%80%93-An-Overview

[pankajbansal89newspatrolling]

What is Tax Deducted at Source (TDS)

 BY: Pankaj Bansal, Founder at NewsPatrolling.com

Tax Deducted at Source (TDS) is a mechanism used by governments, particularly prominent in countries like India, to collect income tax directly from the source of income. Instead of individuals or entities paying their entire tax liability at the end of the financial year, TDS allows for the deduction of tax at the point where the income is generated or received. This system ensures a steady flow of revenue to the government and helps in minimizing tax evasion.

Key Features of TDS

Applicability:

Salaries: Employers deduct TDS from an employee's salary based on applicable income tax slabs.

Interest Payments: Banks and financial institutions deduct TDS on interest earned from fixed deposits, savings accounts, and other instruments.

Rent: Payments made for renting property above a specified threshold are subject to TDS.

Professional Fees: Payments to professionals, consultants, and contractors are often subject to TDS.

Other Payments: This includes commissions, royalties, dividends, and more, depending on the jurisdiction's tax laws.

Deductor and Deductee:

Deductor: The individual or entity making the payment is responsible for deducting TDS. For example, an employer deducting TDS from an employee's salary.

Deductee: The recipient of the payment from which TDS is deducted. For example, an employee receiving the salary after TDS deduction.

TDS Rates:

The rate at which TDS is deducted varies based on the type of payment and the recipient's status. Governments periodically update these rates in their tax regulations.

For instance, in India, as of the latest updates, the TDS rate on salary depends on the income slab, while the rate on interest from banks might be a flat percentage.

Deposit of TDS:

The deductor must deposit the deducted TDS amount with the government within a specified timeframe, usually monthly.

Timely deposit is crucial to avoid penalties and interest charges.

TDS Certificate:

After deducting TDS, the deductor issues a TDS certificate (such as Form 16 for salaries in India) to the deductee.

This certificate serves as proof of the tax deducted and can be used by the deductee when filing their annual tax returns to claim credit for the deducted amount.

Filing TDS Returns:

Deductors are required to file periodic TDS returns detailing the amount deducted and deposited.

These returns are typically filed quarterly and must adhere to the deadlines set by the tax authorities.

Benefits of TDS

Regular Revenue Stream: Ensures a continuous inflow of tax revenue to the government throughout the year.

Reduced Tax Evasion: Minimizes the chances of tax evasion as tax is deducted at the source of income.

Ease for Taxpayers: Individuals and businesses can manage their tax liabilities without facing a large tax bill at the end of the financial year.

Transparency: Provides a clear record of tax deductions, which aids in better compliance and auditing.

Compliance and Penalties

Non-compliance with TDS provisions can lead to various penalties, including:

Interest on Late Deposits: If the deductor fails to deposit the deducted TDS within the stipulated time, interest may be charged.

Penalties for Non-Filing: Not filing TDS returns on time can attract fines.

Prosecution: In severe cases of non-compliance or tax evasion, legal action may be taken against the deductor.

Example Scenario

Salaried Employee:

Suppose an employee has an annual salary of ₹12,00,000.

Based on the prevailing income tax slabs, the employer calculates the applicable tax.

Every month, the employer deducts a portion of the salary as TDS and deposits it with the government.

At the end of the financial year, the employee receives a Form 16 detailing the total TDS deducted.

While filing the annual income tax return, the employee can claim credit for the TDS already paid, adjusting their total tax liability accordingly.

Conclusion

Tax Deducted at Source (TDS) is a pivotal component of modern tax systems, facilitating efficient tax collection and ensuring compliance. By deducting tax at the point of income generation, it simplifies the tax payment process for both taxpayers and the government, fostering a transparent and accountable financial environment.If you're dealing with TDS in your specific context or country, it's advisable to consult with a tax professional or refer to the local tax authority's guidelines to ensure accurate compliance.

[pkpconsult1]

As per provisions of section 194-IB, an individual or a Hindu undivided family who pays rent exceeding Rs.50,000 for a month or part of a month toward house property is required to deduct TDS @ 5 per cent on rent paid to the landlord during a financial year.

[alishajoy059]

Major Compliance Requirements Under Income Tax India: A Complete Guide

Navigating India's complex income tax system requires strict adherence to various compliance requirements. This guide covers the essential compliance obligations for businesses and individuals, ensuring that taxpayers understand their responsibilities and avoid penalties.

1. Filing of Income Tax Return (ITR)

All taxpayers, including individuals, firms, and companies, are required to file their Income Tax Return (ITR) annually. Depending on the type of taxpayer, different forms apply:

ITR-1 (Sahaj): For individuals with income from salary, house property, and other sources.

ITR-2: For individuals and HUFs not having income from business or profession.

ITR-3: For individuals and HUFs with income from business or profession.

ITR-4 (Sugam): For those under the presumptive taxation scheme.

Returns are typically filed between July and September of the assessment year.

2. Advance Tax Payment

Those with significant income beyond their salary must pay advance tax in four installments throughout the year:

15% by June 15.

45% by September 15.

75% by December 15.

100% by March 15.

Failure to do so results in penalties under Sections 234B and 234C.

3. Tax Deduction at Source (TDS)

Employers, businesses, and other entities must deduct TDS for specific payments like salary, rent, and contractual payments. TDS should be deposited within the prescribed deadlines, with quarterly returns filed using:

Form 24Q for salary payments.

Form 26Q for non-salary payments.

Form 27Q for payments to non-residents.

4. Tax Audit (Section 44AB)

Businesses and professionals with turnover above specific thresholds must undergo a tax audit. This ensures that the accounts conform to tax laws and accurate tax liability is computed. The tax audit report is filed along with the income tax return.

5. Maintenance of Books of Accounts

Businesses and professionals are required to maintain detailed books of accounts if their turnover or income exceeds certain limits. Proper accounting helps ensure accurate tax calculations and compliance during audits.

6. Form 15CA/15CB for Foreign Payments

Payments to non-residents may require filing Form 15CA and 15CB. This ensures that any applicable tax is deducted before remitting payments overseas.

7. Furnishing of PAN

PAN is mandatory for numerous financial transactions, such as property purchases, mutual fund investments, and bank deposits. Failure to provide PAN may result in higher tax deductions or penalties.

8. Annual Information Return (AIR)

High-value transactions like property purchases, large deposits, or expensive credit card payments must be reported by financial institutions in the Annual Information Return (AIR). This helps the Income Tax Department detect unreported income.

9. Responding to Tax Notices

Taxpayers may receive notices for various reasons such as discrepancies in returns or scrutiny assessments. Timely responses to these notices are crucial to avoid penalties or legal action.

10. Transfer Pricing Compliance

Companies engaged in international transactions with related entities must comply with transfer pricing regulations to ensure transactions are at arm’s length. This includes filing Form 3CEB and maintaining documentation.

Conclusion

Being compliant with India’s income tax laws involves meeting various deadlines, maintaining accurate records, and understanding specific obligations. By staying informed and following these key requirements, taxpayers can avoid penalties and legal consequences.

[jaagrukbharat]

How To Reduce TDS On Government Bonds In 2024?

In the Union Budget 2024 it was announced that TDS will be deducted at 10% from specific central and state government bonds, including floating rate bonds. It will be implemented from October 1, 2024. The CEO of InCred Money, Vijay Kuppa said "In the Union Budget 2024, the Government has proposed a 10% TDS on all central government securities, state government bonds, and state development loans (SDLs), effective from October 1, 2024.”

What Is Tax Deductable At Source And How Does It Work? TDS is a part of income tax. It has to be deducted by a person for certain payments made by them like rent, commission, professional fees, salary, etc. It is a way for the government to collect tax directly from people’s income.

Let’s understand how TDS works with an example.

Rahul pays Rs 1,00,000 per month as rent for an office to the property owner. By law, Rahul needs to deduct 10% as TDS. This means Rahul will deduct Rs 10,000 as tax and give the remaining Rs 90,000 to the owner. So, the owner receives Rs 90,000 after the tax is deducted. Later, the owner will add the full amount of Rs 1,00,000 to his income when filing taxes and can use the Rs 10,000 that Rahul already paid as a credit towards his final tax bill.

What Is The New Rule? The government introduced a new rule that imposes a 10% Tax Deducted at Source (TDS) on income from government bonds. With the new rule introduced by the government, any interest earned from government bonds will now have a 10% Tax Deducted at Source (TDS) applied.

Let’s understand with an example.

If Mr X earns Rs. 10,000 in the form of interest from government bonds, 10% of the amount, which is Rs. 1,000 will be deducted as tax before he receives the money. This means that instead of getting the entire Rs. 10,000, he will only receive Rs. 9,000.

However, TDS is not an additional tax but is a method for the government to collect tax early. When filing their tax return at the end of the year, they will report the full ₹10,000 as income. They can then use the ₹1,000 that was already deducted to reduce their total tax liability. If more TDS was deducted than necessary, they could be eligible for a refund.

When less TDS is deducted, taxpayers receive more money. This money can then be reinvested to gain more. It also saves them the hassle of waiting for a refund when filing their tax returns.

How To Pay Lower TDS Or Zero TDS? Taxpayers can still avoid paying TDS or reduce the 10%. The government has allowed investors to submit a specific certificate that will help them lower the TDS rate or even avoid it completely.

Get Form 15H or Form 16G.

Declare that the total income is below the taxable limit, so no TDS should be deducted.

Fill out the form with the necessary details.

Submit the form to the organisation or bank from which the government bonds are being purchased.

Form 15H is for individuals who are 60 years old or above, while Form 15G is for others. To be eligible, your total annual income should be below the taxable limit set by the government.

This has to be done during the beginning of the financial year to avoid paying TDS deductions.

[digiblaze]

What Records Do I Need to Keep for Filing My Taxes in Bangladesh?

Maintaining proper records is essential for accurate tax filing and to support your claims in case of an audit. Here’s a list of records you should keep for filing your taxes in Bangladesh:

Income Statements:

Salary Certificates: Issued by your employer, detailing your earnings and deductions.

Business Income Records: If you are self-employed, keep records of all your business income.

Rental Income Records: Documentation of rental income received from properties.

Other Income Sources: Any other forms of income, such as freelance work or consultancy fees.

Bank Statements:

Maintain monthly bank statements for all your accounts. These statements provide a comprehensive view of your financial transactions.

Investment Proofs:

Interest Income Statements: From banks or financial institutions.

Dividend Statements: From companies where you hold shares.

Mutual Fund Statements: Detailing your investments and income from mutual funds.

Expense Receipts:

Medical Expenses: Receipts for medical treatments and health insurance premiums.

Educational Expenses: Receipts for tuition fees and other educational expenses.

Charitable Contributions: Receipts from charitable organizations for donations made.

Property Records:

Purchase Documents: Records of property purchases, including sale deeds and registration documents.

Mortgage Statements: If you have a home loan, keep statements showing interest paid.

Property Tax Receipts: Proof of property tax payments.

Previous Year’s Tax Return:

Keep a copy of your previous year’s tax return. This helps in understanding your financial situation and ensuring consistency.

Tax Deducted at Source (TDS) Certificates:

Salary TDS Certificates (Form 16): Issued by your employer.

Other TDS Certificates: For income such as interest, rent, or commission.

Business Records (if applicable):

Sales and Purchase Invoices: Records of all business transactions.

Expense Receipts: Proof of business-related expenses.

Ledger Accounts: Detailed records of all financial transactions.

Foreign Income Records:

If you have income from abroad, keep records of such income and any taxes paid in foreign countries.

Tax Payment Receipts:

Receipts for any advance tax payments or self-assessment tax payments made during the year.

Keeping detailed and organized records of your financial transactions is crucial for accurate tax filing in Bangladesh. These records not only help in preparing your tax return but also serve as evidence in case of any discrepancies or audits. Make it a habit to regularly update and maintain your financial documents throughout the year. For personalized advice, consider consulting a tax professional.if you want any income tax lawyer you can visit this site https://drgaziandassociates.law

[openestates]

Legal Considerations When Letting Out Your Property: Landlord Obligations

Letting out your property can be a rewarding venture, but it comes with a host of legal responsibilities. As a landlord, understanding your obligations is crucial to avoid legal pitfalls and ensure a smooth rental experience for both you and your tenants. This guide provides a comprehensive overview of the key legal considerations and obligations you need to be aware of when letting out your property in the UK.

Understanding Tenancy Agreements

Types of Tenancy Agreements

The most common type of tenancy agreement in the UK is the Assured Shorthold Tenancy (AST). This agreement provides a fixed term, usually six or twelve months, after which it can be renewed or become a periodic tenancy. It's essential to have a written agreement outlining the terms and conditions, including rent, duration, and responsibilities.

Legal Requirements for Tenancy Agreements

A valid tenancy agreement must include certain legal elements, such as:

The names of the landlord and tenant

The property address

The start and end dates of the tenancy

The rent amount and payment terms

Details of the deposit and how it will be protected

Ensure the agreement is clear and covers all necessary aspects to prevent disputes.

Protecting the Tenant’s Deposit

Deposit Protection Schemes

By law, landlords must protect their tenant's deposit in a government-approved tenancy deposit scheme (TDP) within 30 days of receiving it. In the UK, there are three main schemes:

Deposit Protection Service (DPS)

MyDeposits

Tenancy Deposit Scheme (TDS)

These schemes ensure that the tenant’s deposit is safeguarded and can be fairly returned at the end of the tenancy.

Providing Prescribed Information

Landlords are required to provide tenants with prescribed information about deposit protection within 30 days. This includes details about the scheme used and instructions on how the tenant can retrieve their deposit at the end of the tenancy.

Ensuring Property Safety

Gas Safety

Landlords must ensure that all gas appliances, fittings, and flues are safe. An annual gas safety check must be carried out by a Gas Safe registered engineer. A copy of the gas safety certificate must be provided to the tenant at the start of the tenancy and within 28 days of each annual check.

Electrical Safety

All electrical installations and appliances must be safe. Landlords are required to have an Electrical Installation Condition Report (EICR) carried out every five years by a qualified electrician. Any necessary remedial work must be completed promptly.

Fire Safety

Landlords must follow fire safety regulations, including:

Installing smoke alarms on every floor

Providing a carbon monoxide detector in any room with a solid fuel-burning appliance

Ensuring that furnishings meet fire safety standards

Energy Performance Certificate (EPC)

Before letting out a property, landlords must obtain an Energy Performance Certificate (EPC) and provide it to prospective tenants. The EPC rates the energy efficiency of the property and is valid for ten years.

Handling Repairs and Maintenance

Landlord’s Responsibility

Landlords are legally required to maintain the property in a safe and habitable condition. This includes:

Keeping the structure and exterior in good repair

Ensuring the supply of water, gas, electricity, and sanitation is functioning

Addressing any necessary repairs promptly

Tenant’s Responsibility

Tenants are responsible for using the property in a tenant-like manner, which includes:

Keeping the property clean

Disposing of rubbish properly

Reporting any repair issues to the landlord

Complying with Right to Rent Checks

Right to Rent

Landlords must check that a tenant or lodger can legally rent the property in England. This involves verifying the tenant's identity and right to rent in the UK. Landlords should keep copies of the tenant’s documents as proof of the check.

Penalties for Non-Compliance

Failing to carry out right-to-rent checks can result in penalties, including fines. It is essential to follow the proper procedures to avoid legal repercussions.

Licensing and Regulations

HMO Licensing

If you are letting out a House in Multiple Occupation (HMO), you may need a licence from your local council. An HMO is typically a property rented by at least three people who are not from one household but share facilities like the bathroom and kitchen. Check with your local council for specific licensing requirements.

Selective Licensing

Some councils require landlords to have a licence to rent out any property in specific areas. This is known as selective licensing. Check with your local authority to see if this applies to your property.

Evicting Tenants Legally

Section 21 Notices

A Section 21 notice can be used to evict tenants after a fixed-term tenancy ends or during a periodic tenancy. Proper procedures must be followed, including giving at least two months’ notice and ensuring the deposit is protected.

Section 8 Notices

A Section 8 notice can be used to evict tenants who have breached the tenancy agreement, such as failing to pay rent. The notice period can vary depending on the grounds for eviction.

Court Orders

If tenants do not leave after being served a notice, landlords must apply for a possession order from the court. Eviction without a court order is illegal.

Being a landlord involves understanding and adhering to various legal obligations to ensure a smooth and lawful rental process. By familiarising yourself with these requirements and staying compliant, you can provide a safe and satisfactory living environment for your tenants while protecting your investment.

Ready to let out your property? Ensure you understand and comply with all legal obligations to provide a secure and comfortable home for your tenants. If you need professional assistance, consider consulting a reliable letting agent or legal expert.

FAQ Section

What is an Energy Performance Certificate (EPC)?

An EPC rates the energy efficiency of a property and is required by law before letting out a property. It provides information on the property's energy use and recommendations for improving efficiency.

How often must a landlord conduct gas safety checks?

Landlords must conduct gas safety checks annually and provide a copy of the gas safety certificate to the tenant within 28 days of the check.

What are the consequences of not protecting a tenant's deposit?

Failing to protect a tenant's deposit can result in penalties, including being ordered to pay the tenant up to three times the deposit amount and restrictions on serving a Section 21 notice for eviction. ©

© Open Estates

[cadeveshthakur]

TDS on Rent of Property (Form 26QC) - How to File Online | TDS on Rent 1...

[eazybillssoftware]

A comprehensive guide to Form 16A: A TDS Certificate

Form 16A is a TDS certificate that is issued by the deductor on a quarterly basis. It is a statement concerning the nature of payments, the amount of TDS, and the deposited TDS payments to the Income Tax department. It also consists of brokerage, interest, professional fees, contractual payments, rent, and other sources of income. 

Unlike Form 16, which only consist salary structure, Form 16A of income tax charge TDS from:

Receipts from business or profession fees. 

Rental receipts from a property or rent. 

Sale proceeds from capital assets. 

Additional source.

Important components of Form 16A 

The important components of Form 16A are: 

Details of the Employer: It contains the name, TAN, and PAN of the employer. 

Details of Employee: It contains the name, TAN, and PAN of the employee. 

Mode of Payment: Both offline and online modes of payment are available. 

Receipt number of TDS: The receipt number of TDS helps in the tracking of back details.

The date and deposit tax amount with the income tax department help track information. 

Significance of Form 16A 

Form 16A plays a pivotal role while filing an income tax return, especially when someone has other sources of income apart from their salary. Here are the key benefits of Form 16A:

Filing of income tax returns: The details contained in Form 16A help employees file their income tax returns. It guides employees in reporting their total income, which includes salary and other sources. 

Tracking of TDS: It helps every individual keep track of the tax deducted at source (TDS) on their income. It gives you a summary of TDS deducted at source. 

Income Proof: Form 16A works as evidence of an individual's total earnings from other sources. Government agencies and financial institutions, like banks, easily accept this source as income proof. 

Loan Applications: This form is important in verifying the loan applications. Financial institutions often need a record of the assets and liabilities of an individual to check the guarantee on loan repayment. 

How to download Form 16A?

Below are the following steps to download Form 16A:

Visit the official website of the income tax department. 

Complete the registration process on the website. 

Click the "Download" tab, and then select Form 16A. 

Fill in the PAN details, and then click “Go to continue.”. 

Click submit and download Form 16A. 

What is the difference between Form 16 and Form 16A?

Form 16 and Form 16A are both TDS certificates, but there are certain differences between them. The following are the differences between Form 16 and Form 16A:

Form 16 is a TDS certificate deducted from salary, whereas Form 16A is issued for income other than salary. 

Form 16 is issued by the employer, whereas Form 16A is issued by financial institutions. 

Form 16 is used for deducting tax from salary, whereas Form 16A is for removing taxes from another source of income apart from salary. 

Final Thoughts  

Paying taxes is the responsibility of the citizens of the nation. It is evident that the process of filing an income tax return and Form 16A is restless and troublesome. Some technical terms of income tax are not known to the new taxpayer. Worry not, because Eazybills will solve every tax-related problem and also offer TDS tracking. 

So? What are you waiting for? Connect to us today through our website, where our professional team will guide you according to your requirements.

[addindiagroup]

Don’t Know About TDS on Commercial Property Rent? Find Out Here!

Having real estate might be a fantastic method to generate passive income. It does, however, need you to become knowledgeable about tax rules. You face a number of penalties if you fail to pay your taxes on time.

The Tax Deducted at Source, or TDS, is a remarkable mechanism of the Indian tax system. The TDS amount will be subtracted from the recipient's payment when they make a payment, such as a salary, interest payment, rent, etc. After then, the amount of taxes withheld is sent directly to the government on behalf of the beneficiary. It is employed in a number of national growth initiatives.

Imagine yourself in the confusing situation of having several tenants occupying your business space. While some pay a fixed monthly rent, others pay rent based on a percentage of their sales. In a circumstance like this, how do you compute TDS? We are specifically taking you through the TDS on commercial property rent and its circumstances in this article.

Don't worry; we've provided an easy roadmap to aid you along this path.

What Constitutes Rent?

In the context of commercial real estate, rent is the sum of money paid by a tenant to the landlord in exchange for the right to use and occupy the space. It is the sum that was agreed upon and usually paid on a regular basis, such a monthly or annual basis.

There are several ways to pay for rent: fixed rates, variable rates based on turnover or sales, percentage-based rents, or a mix of these.

The payment of rent is stipulated in the agreements governing the tenancy or lease of land, buildings, factories, plants, industrial or manufacturing facilities, tools, computer systems, other infrastructures necessary for company operations, machinery, fixtures, and furnishings.

Conditions for TDS on Rent

When you make the TDS on commercial property rent, you have to meet certain requirements, like:

If the total annual rent paid or payable by an individual or a Hindu Undivided Family (HUF) over a certain threshold level, TDS is charged on commercial property rent. The tax authorities set this threshold level, which is subject to change.

Unless there is a foreign corporation engaged and the payment paid exceeds Rs. 1 crore, there is no surcharge on the TDS on rent.

In general, TDS applies to commercial properties and specific residential property categories. TDS, however, does not apply to individuals or HUFs that are exempt from the Income Tax Act's requirement that their accounts be audited.

Subject to special rules and rates that apply to non-residents, TDS on commercial property rent is applicable for payments made to both resident and non-resident landlords.

For TDS deduction, the payee needs to be aware of the landlord's PAN number. If they are unaware, section 206AA requires the TDS on rent to be deducted, which rises to 20%.

TDS on rent must be withheld at the time of each rent payment or, if that occurs beforehand, at the point when the landlord's account is credited.

Rate of TDS On Commercial Property Rent

Here, the proportion of the commercial rent that is withheld upon payment is known as the TDS rate on rental commercial property. Ten percent is the typical TDS rate under Section 194-l.

The TDS rate is higher—20 percent of the rent—when the landlord fails to give the tenant their Permanent Account Number (PAN).

TDS is 2% of the rent for machinery and plant rentals.

The TDS rate is 5% of the entire rental payment for individuals or HUF that are not subject to a tax audit.

Commercial Property Rent

Any payment made by a person (tenant) to a resident landlord for the use or occupation of commercial property is covered under Section 194-L of the Indian Income Tax Act as commercial property rent. Particularly covered under this part is rent paid for non-residential properties utilised for business, including factories, shops, warehouses, offices, and other commercial spaces.

According to Section 194-l of the Indian Income Tax Act, a landlord renting a business property must deduct a certain amount as TDS from the rent paid by the tenant. If the annual rent exceeds Rs 2.4 lakhs, 10% of the rent is tax deductible at source.

Furthermore, according to Section 194-lB of the Income Tax Act of 1961, taxes at the rate of 5% or 3.75% must be subtracted from all transactions made by renters or property payers when they pay rent to the landlord or payee. The tax that is withheld from any authorised bank branch will be credited to the government's account.

Particularly, payments provided to resident landlords are covered by Section 194-L. Section 195 and other requirements of the Income Tax Act may apply to payments paid to non-resident landlords. Source Link : https://addindiagroup.com/dont-know-about-tds-on-commercial-property-rent-find-out-here/

[realestatexpert]

Rental income is a common source of revenue for many individuals and businesses. It refers to the income earned by leasing out property, such as houses, apartments, commercial spaces, or land, to tenants in exchange for periodic payments, usually monthly rent. While rental income can be a significant source of revenue, it is essential to understand its tax implications, including Tax Deduction at Source (TDS) and Goods and Services Tax (GST).

[mygstrefund]

Renters and Landlords Take Note: Income-Tax Act Revamps Rental Deductions

Explore recent ITA changes for rental income and tax deductions. New TDS rates: 2% for equipment, 10% for property. Exemption for rent below Rs. 1.8 lakh, but high earners must deduct TDS. 'Rent' definition broadened. Compliance is key for all.

Read Our Detailed article in the below link 👇- https://www.mygstrefund.com/Renters-Landlords-Income-Tax-Act-Revamps-Rental-Deductions/

THANKS FOR READING! We provide GST refund solutions for customers.

To know more please visit: www.mygstrefund.com Join Our Community: community.mygstrefund.com Contact Us: +91 9205005072 Mail- info@mygstrefund.com

[lawyer2ca]

🚀 Exciting Tax Updates for 2024! 🚀

Hello @lawyer2ca community! 🌐

Get ready for a transformative year ahead as we bring you the latest scoop on the 15 game-changing tax amendments for 2023 that are set to redefine your financial landscape in 2024! 💼💸

Here's a quick rundown:

1-New Tax Regime Slabs: Revamped to be more enticing, offering a boon to those unable to invest in tax-saving instruments previously.

2-Hike in Basic Exemption Limit: Save up to Rs 15,000 with the basic exemption limit under the new tax regime raised to Rs 3 lakh.

3-Default Tax Regime: The new tax regime becomes the default choice from April 1, 2023. Opt for the old regime if you seek common tax deductions.

4-Increased Rebate under Section 87A: Enjoy a higher rebate of Rs 25,000 under section 87A for taxable income up to Rs 7 lakh.

5-Standard Deduction in New Tax Regime: Salaried individuals with up to Rs 7.5 lakh taxable income benefit from a Rs 50,000 standard deduction.

6-No LTCG Benefit in Debt Mutual Funds: Post March 31, 2023, investments in debt mutual funds lose Long Term Capital Gains (LTCG) tax benefits.

7-Marginal Tax Relief for Small Taxpayers: A sigh of relief for individuals with slightly exceeding Rs 7 lakh taxable income.

8-Reduced Surcharge Rates: The highest surcharge rate for those earning over Rs 5 crore reduced from 37% to 25%.

9-Increased Tax Exemption on Leave Encashment: Non-government employees can now enjoy tax exemption on leave encashment up to Rs 25 lakh.

10-New Rules for Rent-Free House Salary: The CBDT introduces fresh rules for rent-free accommodations, potentially lowering TDS.

11-Tax on Maturity Amount from Non-ULIP Life Insurance Policies: Maturity amounts exceeding Rs 5 lakh are now taxable for non-ULIP life insurance policies issued after April 1, 2023.

12-Limit on Capital Gains Deductions from Property Sale: A cap of Rs 10 crore on maximum deductions from property sales.

13-Discard ITR Option: Introducing the Discard return option, allowing deletion of unverified ITR submissions.

14-TDS on Online Game Winnings: TDS on online game winnings is now applicable without any threshold, at a rate of 30%.

15-Relief on Higher TDS for Non-ITR Filers: Non-mandatory ITR filers won't face higher TDS on bank FDs, dividend income, and specified incomes.

Stay ahead of the curve and ensure your financial strategy aligns with these changes! 💡��✨

For detailed insights, connect with our tax experts.

#Tax2024 #FinancialFreedom #TaxChanges #StayInformed #Lawyer2CA 📊🔍

[shiv100]

TDS (Tax Deducted at Source)

TDS (Tax Deducted at Source): What is it?

TDS (Tax Deducted at Source) is the term used to describe when income tax is subtracted from payments that are specifically covered by the income tax, such as rent, professional fees, commission, salary, interest, etc. When receiving income, an individual is required to pay income tax. According to a government provision, income tax will be withheld from your payments ahead of time. “tds on sale of property” Your take-home pay is the net amount remaining after source-reduced taxes.

TDS on property sold in accordance with section 194-IA

Only properties valued at more than Rs 50 lakhs are subject to TDS when they are sold. A buyer must legally pay 1% of the transaction cost as TDS on the sale, according to Section 194-IA (Income Tax Act). 

The buyer must subtract 1% TDS from the value at stamp paper or the actual price, whichever is higher, in accordance with the new budget 2022 rule.

On real estate sales, who deducts TDS?

Any time an immovable property is purchased, the buyer is required to deduct the TDS. It's a tax taken out of the original system to stop unethical behavior. When buying property of a certain type, the buyer is required to deduct 1% TDS from the total amount paid and deposit the remaining funds into the Indian government's account. Form 26AS or a TDS certificate from the buyer may be used to credit the seller for the amount deducted. “tds on purchase of property”

Should any of the parties to the agreement neglect to fulfill their obligations, there will be a penalty.

TDS on real estate sales in 2023

kinds of properties covered by TDS

private land

Business Real Estate

Land Note: The TDS Act does not apply to agricultural land.

How is the TDS deducted and paid for?

A buyer is required to finish the process of remitting TDS into the Government of India's account within the first thirty days following the end of the month of the conveyance deed. In order to pay TDS, a Form-cum-challan no. 26QB is needed. If there are multiple buyers or sellers for the property, each must complete a separate Form 26QB with all the necessary information.

TDS on an NRI's property sale

For long-term capital gains—property bought and sold after two years—the TDS rate is 20%. The TDS rate would fall below the NRI tax bracket for short-term capital gains, which are defined as property sales that occur within two years of purchase.

TDS on joint owners' property sales

TDS would not be applicable if a buyer's share of the property is less than Rs. 50 lakh and there are joint buyers, per section 194 1A and the Delhi Bench income tax tribunal's decision. 

How can I get my TDS back when I sell my property?

After TDS is deducted and paid along with the income, a buyer gives Form 16B to the seller of the real estate. 

Extensive data needed to cover TDS

Information about the seller and buyer needed to pay TDS

Information required for Form 26QB filing includes 

Name, address, PAN, phone number, email address, and full property address

Date of the agreement Total amount of money paid

Date of payment; no TDS deduction

On immovable property, there is no such TDS provision.

When is the TDS expected to be deposited?

For instance, a TDS that was withheld in March needs to be transferred to the Indian government's account by April 7. This implies that TDS must be deposited by the seventh of the following month after a buyer deducts the tax.

Consequences of not paying TDS

Penalty for failing to pay TDS within the legally stipulated timeframe: the buyer faces fines in the form of interest or a hard seven-year jail sentence. “tds on purchase of property section”

How can I obtain Form 16 by paying TDS using Challan 26QB?

Complete Form 26QB with all necessary information, including the buyer's and seller's PAN and property details.

Maximum paid/credited amount and tax information

Seller and buyer's contact information

Buyers should keep in mind the seller's residential status factors.

Don't enter a PAN number or any other incorrect information.

Check PAN Specifics

The Income Tax Department would be involved in any correction. Things the Seller should keep in mind

Verification of Deposit for your Annual Tax Statement on Form 26AS.