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

Company not liable for TDS on Rs. 30,000 May rent under amended Section 194I monthly threshold A private limited company paid Rs. 30,000 rent in May 2025 and Rs. 90,000 monthly from June onwards, questioning TDS liability under amended Section 194I. Tax experts clarified that the company is not liable to deduct TDS on the May payment of Rs. 30,000. The amended provision applies month-wise rather than annually, with TDS required only when monthly rent exceeds Rs. 50,000. The amendment operates prospectively from April 2025 without retrospective liability for months where rent was below the threshold.