TDS Deduction under section 194I

[Rajat Gupta]

If a Private Ltd. Co. has paid rent Rs. 30000 for May 2025 and from June onwards it is paying 90000 p.m. does the company liable to deduct TDS on 30000 also as per the new amended provision?

[Ramanathan Seshan]

Dear sir,

As per the amended proviso:

TDS is now applied month-wise, not based on annual rent.

If in any month, rent paid or credited exceeds ?50,000, then TDS applies only to that month (and subsequent months where rent > ?50K).

No retrospective liability for TDS in months where rent was = ?50,000

Regards,

S Ram

[Harshaditya Kabra]

No, the company is not liable to deduct TDS on the Rs. 30,000 rent paid in May 2025. The amended Section 194I provisions, which change the threshold from Rs. 2.40 lakh annually to Rs. 50,000 per month, apply prospectively from April 1, 2025 and operate on a month-wise basis.

AI Summary

TDS threshold on rent is assessed monthly; no retrospective liability for months below the monthly threshold.
Section 194I withholding on rent is assessed month by month: TDS is chargeable in any month when rent paid or credited in that month exceeds the statutory monthly threshold, and no retrospective deduction is required for months in which monthly rent did not exceed the threshold.