Demo

Photo: File Budget

Finance Minister Nirmala Sitharaman On Saturday, announced to increase the annual limit of tax deduction on rent from Rs 2.4 lakh to Rs 6 lakh. In her budget speech, Finance Minister Nirmala Sitharaman said, “I propose to rationalize the tax deduction (TDS) at the source by reducing the rates and limits of TDS. In addition, the limit amount of tax deduction will be increased for better clarity and uniformity. He announced that the annual limit of Rs 2.40 lakh for TDS on rent is being increased to Rs 6 lakh. The Finance Minister said that this would reduce the number of transactions responsible for TDS, which will benefit small taxpayers in receiving small payments.

What does the rule say?

According to the budget document, according to Section 194-I of the Income Tax Act, any person who is responsible for giving any income to a resident of rent, should be deducted only when such rental income should be deducted at the applicable rates. The amount should be more than Rs 2.4 lakh in a financial year. It states, “For the need for tax deduction at the source, it is proposed to increase this limit of income from Rs 2.4 lakh to a month or one month in a financial year in a financial year.

What will be the benefit?

Tax expert says that this proposal made in the budget affects all those who rent (or receive) and are subject to TDS- whether it is home fare or rent of offices, shops or other properties yes. Increasing the annual TDS-on-Rant limit from Rs 2.40 lakh to Rs 6 lakh will reduce the requirement of TDS deduction in low-price rental transactions. This will mainly benefit the landlords (especially small landlords), who get less than Rs 6 lakh per year, as the tenants will no longer deduct TDS on that rent. This will also benefit the tenants paying less rent, as they will not have to handle additional paperwork or compliance related work related to cutting and depositing TDS. That is, if the annual fare is less than Rs 6 lakh, then the TDS on rent will not apply (if this proposal becomes law). Its purpose is to help small taxpayers.

Latest business news

Share.

Leave A Reply