TDS on rent rate change under Section 194IB: applicable rate depends on timing of last-month rent credit/payment.
An amendment to Section 194IB reduces the TDS rate on qualifying rent from five percent to two percent effective October 1, 2024. Individuals and HUFs (not subject to tax audit) paying monthly rent above the threshold must deduct tax on the rent for the last month of the previous year or the last month of tenancy at the time of credit or payment; the applicable rate is determined solely by whether that credit/payment occurs before or on/after the amendment date. Deduction is made once per year, must be deposited, and a certificate issued; payees may claim credit when filing returns. (AI Summary)