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Who is required to deduct tax under section 194-IB ?
As per section 194-IB , every Individual and HUF, whose turnover or gross receipt from business or profession doesn't exceed Rs. 1 crore in case of business and Rs. 50 lakhs in case of a profession in the immediately preceding financial year, is required to deduct tax at the rate of 2% from payment of rent.
The tax shall be deducted under this provision even if the individual is not engaged in any business or profession and is just earning a salary or any other income.
When this section is applicable?
Tax is required to be deducted under this provision only if the rent is payable to a person who is a resident of India. The tax shall be deducted if the rent paid or payable exceeds Rs. 50,000 per month or part of the month.
How and when to file the TDS return?
To file the TDS return, the deductor has to fill out a challan cum statement in Form 26QC within 30 days from the last day of the month in which the tax has been deducted.
What are the consequences of failure to furnish TDS return?
If a person fails to file the TDS statement within the prescribed time then he shall be liable for payment of fee under 234E at the rate of Rs. 200 per day during which such default continues. However, such fee shall not exceed the amount of TDS. Further, he may also be liable for payment of penalty under section 271H and section 272A .