#tds on rent section 194ib

[casansaar]

New TDS Rate on Rent from 1st October 2024 - Section 194IB of Income Tax Act

[mehtarajesh959-blog]

Decoding Form 26AS – A Handy Guide for Beginners

With the income tax filing season in full swing, it is only natural that each of us takes stock of our situation with regards to ensuring easy filing of income tax returns. Two of the documents that are considered to be key for the purpose of income tax filing are Form 16 and Form 26AS. The first of these is provided by the employer and only applicable to salaried employees/pensioners. The other one – Form 26AS is available for download on the TRACES (TDS Reconciliation, Analysis and Correction Enabling System) website and available to all tax assessees irrespective of whether they are salaried, self-employed or self-employed professionals. In the following sections we will discuss the key features and details of Form 26AS.   

What exactly is Form 26AS?

The official definition provided by the Income Tax Department defines Form 26AS as a tax credit statement that contains records of any and all transactions featuring TDS during a specific financial year. As a result, this document is also known as the Annual Tax Statement. In order to collect this data, the IT department uses your PAN (Permanent Account Number) which is mandatory for a range of financial transactions. The generation of this form is as per regulations specified in Section 203AA of the Income Tax Act, 1961

What information can I find in my Form 26AS?

The following are the key information that is available in your Form 26AS:

Your personal details such as Name, PAN, Address, Financial Year and Assessment Year

TAN (Tax Deduction and Collection Account Number) of deductor

Details of TDS (Tax Deducted at Source) deposited with the government including individual TDS deposits and date of each deposit

Break down of different types of TDS applicable to your transactions for the applicable AY

What are the Key Sections of Form 26AS?

Form 26AS features multiple parts each of which features data regarding a specific type of TDS applicable to transactions related to your PAN for the applicable period. The following is a short overview of each of these parts of the form: 

Part A – Tax Deducted by your Employer from salary payouts in lieu of income tax liability

Part A1 – TDS on bank FD/RD and other transactions on which Form 15G or Form 15H are applicable

Part A2 – TDS applicable to sale of immovable property (Section 194IA)and rent on property (Section 194IB) if you are seller or landlord

Part B – Detailed information of tax collected at source (TCS)

Part C – Details of Tax Paid apart from TDS and TCS

Part D – Refund paid by IT Department during the applicable FY

Part E – AIR (Annual Information Return) transaction TDS details

Part F - TDS applicable to sale of immovable property (Section 194IA)and rent on property (Section 194IB) if you are buyer or renter

Part G – TDS defaults information on processing of statements

How Do I Download Form 26AS? 

Form 26AS is available for free download from the TRACES website. You can complete the free download of the form in the following ways: 

Create and register for an account on the TRACES website

Log on to your Income Tax e-Filing Account and click on the Download Form 26AS

Log onto your Internet Banking account and locate the Download Form 26AS link located under the “tax services” menu (supported by most major public and private sector banks in India) 

If you avail the second or third option listed above, you will be redirected to the TRACES website where you can select the applicable FY and download the Form 26AS in PDF format or view it on the screen.  

Why do I need my Form 26AS? 

Form 26AS is the key document that the assessing officer utilises to view all applicable data of your income tax and TDS-related transactions for the applicable assessment year. In fact, the data featured in Form 26AS can be used in order calculate your income, TDS and tax liability, which is in fact what your assessing officer does. In case of a mismatch between TDS information between Form 26AS and any other tax document such as Form 16, the data contained in Form 26AS will supersede all other data. The following are the key reasons to download and check Form 26AS: 

Ensure correctness of data on other tax documents when compared to Form 26AS

Ensure that none of the TDS transactions have been missed

Ensure that your tax liability and income tax payable calculations are in line with details available in Form 26AS

What to do if there is a mismatch between Form 26AS and any other tax form?  

In case you find a mismatch between Form 26AS data vs. any other tax document, you need to address it immediately and get in touch with the applicable authority seeking a clarification. The following are the applicable authority you need to get in touch with depending on the section of Form 26AS where you find the discrepancy: 

[vjmglobal]

CBDT notifies revised Form 26AS, include real estate, share transaction details

On 28th May, 2020, vide Income Tax (11th Amendment) Rules, 2020, effective from 1st June, 2020, Income Tax department deleted Section 203AA of Income Tax Act read with Rule 31AB of Income Tax Rules, 1961 and inserted a new Rule 114-I to introduce amendment in Annual Information Statement in by revised form 26AS.

Section 203AA read with Rule 31AB of Income tax Act, 1961 requires the Director General of Income Tax or any other person authorised on his behalf to send details to every taxpayer in Form 26AS-Annual Information Statement. Form 26AS contains following details:

PAN, Name and Address of Taxpayer

PART A – Details of Tax Deducted at Source

PART B – Details of Tax Collected at Source

PART C – Details of Tax Paid (other than TDS or TCS)

Part D – Details of Paid Refund

Part E – Details of SFT Transaction

PART F – Details of Tax Deducted at Source on Sale of Immovable Property u/s 194IA/ TDS on Rent of Property u/s 194IB (For Buyer/Tenant of Property)

PART G – TDS Defaults (Processing of Statements)

Therefore, Revised Form 26AS helps in prevention of tax evasion and also assists tax payers in disclosing complete details in Income Tax return.

Amended Form 26AS The Income Tax Act- (11th Amendment), 2020

Revised form 26AS contains more detailed information and help in better check over tax evasion.

The amended version of the Form 26AS highlights every transaction details above a certain limit that includes the credit card bills, Bank deposits and any other investments by the taxpayers.

The intention of bringing this new amendment in the Taxation system to generalise the information flow and transparency between the tax authorities and tax-payers.

The new revised Form 26AS will help the tax authorities to maintain the assesses profile and the transaction details for better tax filing with full confidentiality. It will help the taxpayers as well to regulate their overpayments or dual tax payments in the same financial year.

1. Salient features of Revised Annual Information Statement (Form 26AS):

Rule 114-I, read with Section 258BB of Income Tax Act, requires the Principal Director of Income Tax (Systems) or Director General of Income Tax (System) to upload Annual Information Statement in form 26AS in every taxpayer’s account.

In addition to the information reported in original Form 26AS, revised Form 26AS requires reporting of following additional information

1.1 Aadhar Number, Date of Birth, Mobile Number and Email address of taxpayer in revised form 26AS

More updated information will help the department authority in better maintenance of data.

1.2 Information relating to specified financial transactions in revised form 26AS

Income Tax act required specific persons, including financial institutions,  to report certain information to department authorities. Transactions required to be reported are:

Transaction of purchase, sale/ exchange of goods or property or right or interest in a property; or

transaction for rendering any service; or

transaction under a works contract; or

transaction by way of an investment made or an expenditure incurred; or

transaction for taking or accepting any loan or deposit

Department has notified various transactions to be reported as SFT in Rule 114E

1.3 Information relating to demand and refund in revised form 26AS

Earlier information to demand was not available in form 26AS. However, the amended form 26AS contains information related to demand or refund related to the taxpayer.

1.4 Information relating to completed and pending proceedings in revised form 26AS

Information against pending proceeding is also available in form 26AS. Therefore, it is not possible for the taxpayer to hide information related to its proceedings.

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[gujreraexperts]

By anyone paying rent of more than Rs 50,000

Under Section 194IB, any individual or entity paying more than Rs 50,000 per month in rent is required to deduct TDS at 5%. Such TDS only needs to be deducted once a year. For example if you have an 11 month rent agreement, you can deduct the TDS amount for the whole year’s rent in the 11th month. Let’s assume that your rent is Rs 80,000 per month, which translates to 9,60,000 per year. This means that you have to deduct TDS of Rs 48,000 in the 11th month from the rent of Rs 80,000 payable for that month. The deductor also does not need a TAN (Tax Deduction Account Number).

[thetaxtalk]

TDS Traces sites levying penalty for late filing of TDS return for first Quarter

TDS Traces sites levying penalty for late filing of TDS return for first Quarter The question which is remerging again and again is whether the TDS Return Due Date for 1st Quarter of the FY 2020-21 is extended or not? The question is remerging for the reason that the person who is filing TDS return for the first quarter on 1st August or 2nd august, the TDS traces site is calculating the late fee in all such cases.  Let us revisit the entire issue, reasons & the remedy. Normally, TDS Provision requires Quarterly filing of TDS return and thereafter issue of TDS certificate to the Deductee. Exception is in respect of TDS in respect of property and rent covered by section 194-IA & 194IB wherein TDS return cum challan is to be done on monthly basis. The normal due date of filing TDS return and issue of TDS certificate is contained in section 200(3) of the Income Tax Act read with Rule 31A of Income Tax Rules, 1962. Rule 31A(1)(b)(ii), 31A(2), 31(3) requires filing of quarterly TDS statements u/s 200(3) in Form No. 26Q & issue of TDS certificate in Form No. Read the full article

[taxrodo]

All Individuals & HUFs (except those liable to audit under section 44AB) paying monthly rent more than ₹50,000 are liable to deduct TDS u/s 194IB @5%

It's important to note that this section is also applicable to Salaried taxpayers, which means that if a Salaried individual is paying monthly rent more than ₹50,000 then he/she needs to deduct TDS.

[realtyfacts-blog]

Check Your Pocket If You are Paying GST and TDS

EXISTING TAX OBLIGATION LAWS

Currently, the landlord needs to get a service tax obligation registration in case the taxable service inclusive of the rental revenue from all the residential or commercial properties across the nation surpasses Rs 10 Lac per year. This, as a result suggests that as lengthy as revenue from residence property, from all the residential or commercial properties doesn't go beyond 10 Lac you are not in the solution tax obligation web.

This point suggests that currently service tax obligation is levied only on industrial residential or commercial properties and out domestic properties. If your household building is being utilized as an industrial, it is subjective to service tax.

RECOMMENDED CONDITION UNDER GST

Unlike under the current solution tax guideline, the threshold limitation for applicability of GST has actually been boosted from Rs 10 Lac to Rs 20 Lac. Consequently, most of building owners that were earlier dropping under the rule of service tax are currently excused of it. The GST is recommended to be imposed at 18%, on the letting-out of business properties.

ARRANGEMENT OF TAX OBLIGATION REDUCTION ON THE INCOME TAX FOR ANY SERVICE PROPERTY

Unlike exactly what takes place in case of Solution tax as well as GST where the property manager who is liable to gather the service tax/SGT from the tenant on the lease butted in situation he is signed up under the legislations, in case of the income tax laws the tenant or occupant can subtract revenue tax obligation at source at 10% in instance the rental fee of the home surpasses 1.80 Lac each annum. Exactly what is very important to note is that the TDS arrangements are applicable for both residential and industrial homes.

Another crucial arrangement introduced in the spending plan 2017 is for the reduction of TDS on rental fee as well as this stipulation has been made appropriate for the individuals or the Hindu Undivided Families who are not required to get their accounts examined. This implies that if a specific or HUF is paying a lease of Rs. 50,000 each month as well as is not signed up in the classifications stated above, he would be needed to deduct TDS at 5% under area 194IB

One of the best as well as the very best income these days in a lot of cities of India is rental income-- for tenant-occupied residential or commercial property, rental income of the individual is the internet revenue from the present manufacturing.

THE DETAILS OF LEASING INCOME AND TAXES

The rental income is tired under the head 'earnings from home residential or commercial property' under the earnings tax obligation regulation-- the direct tax obligation law of the nation. The residential or commercial properties that have been let-out are likewise subjected to indirect taxes, which is presently in the kind of solution tax obligation. The occupant of the residential property might additionally be called for to subtract TDS (Tax obligation Subtracted at Resource), while the GST (Goods as well as Service Tax obligation) will certainly additionally leave some influence on the tax computation on the rental income. The idea was to broaden the scope of TDS, adhering to which the federal government has placed a brand-new section of 194-IB in the I-T Act to offer that a private or a HUF (apart from those covered under 44AB of the Act), in charge of paying to a resident any kind of income using rent surpassing Rs.50000 for a month or part of month throughout the previous year, will deduct a quantity equal to 5% of such earnings as income-tax thereon. This modification has entered complete force from 1st June, 2017.

The rental earnings is taxed under the head 'income from house home' under the earnings tax obligation regulation-- the straight tax obligation regulation of the nation. The homes that have been let-out are likewise subjected to indirect taxes, which is currently in the kind of service tax obligation. The resident of the residential or commercial property may also be called for to deduct TDS (Tax Subtracted at Resource), while the GST (Item and also Solution Tax obligation) will certainly also leave some effect on the tax calculation on the rental income.

Many of home proprietors that were earlier dropping under the rule of service tax obligation are now exempted of it.

[itspropertyadviser-blog]

Rental Reforms Redefine the Indian Realty Field

The upward trajectory of consumer belief is a solid indication that the marketplace has reacted well to these reforms. The incumbent Government has begun on an identified trip to change the Indian real estate market right into a more wholesome industry.

A number of development reforms with pertinence to the Indian realty market saw the light of the day over the last one year. Be it demonetization-- the Federal government's 'surgical strike' versus black loan-- the unified tax obligation or the innovative rera routine of GST-- all bore the power of making the Indian realty sector a lot more expert and also clear.

While the key and also secondary domestic markets most certainly profited from the plethora of reforms, the rental market has likewise obtained a shot in the arm. Different reforms and also statements transformed the last one year can potentially improve this vital sector of the Indian realty industry:

The winds of change have actually clearly begun to blow post-demonetization. Both tenants as well as proprietors currently choose to maintain their transactions clean by not enjoying any cash settlements. Occupants have also come to be a lot more attentive relating to the rental arrangement and rent receipts.

April 2017: An End to Fake Rental fee Invoices Under Section 10( 13A) of the Earnings Tax obligation Act, staff members can make use of tax exception under Home Rent Allocation (HRA). Hitherto, staff members merely should submit rental fee invoices to make use this benefit, in addition to the proprietor's PAN details if the rental fee quantity went beyond Rs 1 lakh per annum.

June 2017: Withholding Tax The brand-new area (194IB) presented in the Earnings Tax obligation Act makes it mandatory for individuals paying a regular monthly lease of greater than Rs 50,000 to hold back taxes at 5% on rental repayments, as well as to deposit this quantity within a prescribed time. Before this change, people were not called for to withhold such tax. This brand-new section has been inserted to widen the range of TDS (tax obligation subtracted at source).

With this, landlords obtaining higher earnings as rent will certainly come under the tax obligation scanner. They will certainly now be responsible to report the complete rental income in their income tax return in order to claim the advantage of the TDS amount. With the current linking of FRYING PAN and Aadhar numbers, the possibilities of negligences going unnoticed have decreased significantly.

Nonetheless, with its choice to top the loss on second property purchased with a mortgage, the Government has actually efficiently plugged a tax technicality utilized by innumerable staff members for tax exception. As each the current tribunal judgment, the evaluating officer could currently demand proof-- such as the leave and permit contract, and also a letter to the housing co-operative society notifying concerning the occupancy, power costs, water expense, and so on

July 2017: Design Tenancy Act To change the out-of-date five-decade-old Structures (Lease and Rental fee Control) Act, the State Closet of Tamil Nadu introduced its purpose to bring in a law based on the Model Occupancy Act distributed by the Central Federal government. The new legislation aims to stabilize the civil liberties and obligations of both the property owners as well as tenants.

. This new judgment has punished the technique of salaried employees submitting sham rent invoices.

A few of the significant features of the law:

Mandatory registration of all rental agreements over 11 months Constraint of down payment quantity to 3 months' worth of rental fee Limiting of occupants' right to proceed staying after the lease period to 6 months. With a balanced legislation in position, a lot more homeowners are anticipated to come onward and blurt their residential or commercial properties.

Why Has Rental Real estate Not Removed?

In spite of its immense possibility as a market force, why has the Indian rental housing section has not made skilled headway? The key reason is that it is a mainly unorganized industry, and designers do not locate building job exclusively for the rental purpose a really practical organisation suggestion. The price of developing a home is way greater compared to the rental returns they can expect, taking into consideration the rental returns that Indian cities bring.

Traditionally, the stringent pro-tenant laws of the State-enacted Rental fee Control Acts (RCAs) have actually prevented property managers from leasing out their buildings. Reversing rent control will certainly increase the confidence of property proprietors with an eye on rental returns, as well as thus help unlock uninhabited systems.

What A lot more Should Be Done?

In spite of its immense potential as a market pressure, why has the Indian rental housing segment has not made skilled progression? The price of building a house is way greater compared to the rental returns they can expect, considering the rental yields that Indian cities fetch.

Rescinding rental fee control will certainly enhance the confidence of property owners with an eye on rental returns, as well as therefore aid unlock uninhabited units.

Additionally, it now is an arising market truth that most of India's millennials favor to lease rather compared to purchase residences-- mainly since the residential or commercial property prices in many of the city cities are not budget-friendly, as well as because the rental option can offer much better area advantages. In addition to the economic factors, rental real estate includes the advantage of convenience and versatility for the busy Ola as well as Uber generation.

While the Federal government has started the engine, it is currently about time to flooring the accelerator as well as fully check out as well as unpack the large possibility of rental housing in India.

The Central Government is currently intending to release a 'rent out to possess' system under the National Urban Rental Housing Policy which will allow people rent out residences from Government establishments. Under this plan, individuals will have the choice to acquire the home they have actually rented by paying the complete cost in very easy instalments.

The Government, with its enthusiastic 'Real estate for All by 2022' objective, is likewise half method through its period, and the pace of housing building is still far behind schedule. It is a distinctive Indian paradox that despite the severe real estate lack, approximately 11 million units lie extra and also uninhabited. Clearly, efficient use this existing supply using rental real estate (in markets where trunk framework remains in location) would alleviate some of the pressure.

The brand-new section (194IB) presented in the Earnings Tax obligation Act makes it compulsory for people paying a monthly rent of more than Rs 50,000 to withhold taxes at 5% on rental repayments, and also to transfer this amount within a recommended time. Tenants have likewise become much more vigilant pertaining to the rental contract as well as lease receipts.

Over the previous few years, the nation has seen a socio-economic and social change. From 5.5 million to 9 million a year, migration of individuals in quest of far better education and learning and also career chances in Indian cities from peri-urban as well as country areas has nearly increased in the last 10 years. This directly presses up the demand for rental housing.

The draft National Urban Rental Real estate Policy intends to minimize housing lack in urban areas by encouraging leasing out of these vacant residences across the country. Residential REITs are can likewise alleviate the placing unsold stock, as they have performed in countries like the USA.