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.

AI Summary

TDS on rent arrears: include retrospective arrears when assessing threshold and deduct tax at credit or payment.
TDS on rent is required at the earlier of credit or payment and includes retrospective arrears paid in the current period; therefore the payer must include arrears when determining the threshold and deducting tax. Relief provisions designed for past salary arrears are not applicable to rental income and cannot be used to avoid deduction on rent arrears.