TDS FOR ARREARS OF RENT

[DR.MARIAPPAN GOVINDARAJAN]

The monthly rent of a premises is ₹ 20,000/- . Since the total rent for the year is ₹ 2,40,000/- tax is liable to be deducted at source.

The agreement to enhance the rent with retrospective effect from 01.01.2015. Therefore the arrears of rent is to be paid.

Whether the tax is to be deducted for the current financial year ₹ 240000/- or including the arrears to be given from 01.01.2015 to 31.10.2016?

Please advise.

[Ganeshan Kalyani]

Sec. 194I - Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any income by way of rent, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon .

In view of above provision , the tds shall be deducted on the rent amount including arrears received in the current period. the threshold limit includes arrears in addtion to rent amount . thanks.

[DR.MARIAPPAN GOVINDARAJAN]

Whether the provisions of 10(E) is applicable in this case?

[Ganeshan Kalyani]

The relief u/s 89 is applicable in case of past arrear salary received in the current year. to claim this benefit assessee has to file Form 10E. but the query pertains to Rental income. hence in my view the provision of section 89 where form 10E need to be filed to claim relief is not applicable in this case .

AI Summary

Clarification on TDS for Rent Arrears: Section 194I Applies, Not Section 10E; Salary Arrears Rules Don't Apply A discussion on a forum addresses whether tax should be deducted at source for rent arrears. The monthly rent is 20,000, totaling 2,40,000 annually, necessitating tax deduction. The rent was retrospectively increased from January 2015, leading to arrears. One participant clarifies that under Section 194I, tax should be deducted on the total rent, including arrears. Another participant queries the applicability of Section 10(E), but it is clarified that Section 89 and Form 10E, which pertain to salary arrears, do not apply to rental income.