Hi,
Just heard that employees who are claiming HRA and paying rent more than Rs. 50,000 need to deduct TDS on rent amount and pay to government.
How it works? I mean someone can provide details of:
- Who need to deduct TDS on rent paid to owner above 50,000?
- Every employee has to deduct TDS or is their any exemption?
- What if employee did not deduct the tax?
- If TDS deducted and not paid to government, what are the penalties and interest?
I feel this provision is really trouble making for some employees.
Posted 3 years, 9 months ago by Rahul Rai
Dear Rahul
Yes you are right it is a new section in income tax act this will be effective from 1st June 2017.
1. Every Individual or HUF paying a rent of a amount exceedding Rs.50,000 p.m is liable to deduct TDS @ 5%.
2. Only those who are claiming Rent Paid in HRA Exemption exceeding Rs.50,000 are liable to deduct TDS.
3.Failure to deduct TDS will attract a interest of 1% p.m or part thereof since the date TDS was deducted till it is actually deducted
4.Failure to deposit TDS after deducting the same will attract a interest of 1.5% p.m or part thereof.
Further A.O can impose penalty under Section 271C.
Regards
CA Bhuwan Sharma
Write me on: bhuwan.chand.sharma@icai.org
Posted 3 years, 9 months ago by NRO0263978 BHUWAN CHAND SHARMA
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