Individual taxpayers must deduct 2% tax on monthly rent payments exceeding Rs 50,000 under Section 194IB
Section 194IB of the Income Tax Act mandates tax deduction at source on rent payments. Individuals or Hindu undivided families paying rent exceeding fifty thousand rupees monthly to residents must deduct two percent as income tax. Deduction occurs at the time of crediting rent for the last month of the previous year or tenancy, or payment, whichever is earlier. The provision excludes certain categories and limits deduction to the last month's rent amount. Rent includes any payment for land or building use under lease or tenancy agreements.
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