At what rate tax to be deducted u/s 194I?

(a) Rent of Plant Machinery or equipment 2% (b) Rent of Land, Building or furniture to an individual and Hindu undivided family. 10%

> The rates of TDS in case of rent shall be as under: **Nature of payment – Rent (194I)** (a) Rent of Plant Machinery or equipment 2% (b) Rent of Land, Building or furniture to an individual and Hindu undivided family. 10% (c) Rent of land, Building or furniture to a person other than an individual or Hindu Undivided Family. 10%

Different Rate of Deduction are made / Done for the different type of ASset (a) Rent of Plant Machinery or equipment 2% (b) Rent of Land, Building or furniture to an individual and Hindu undivided family. 10%

Any person responsible for making payment of rent to a resident is required to deduct tax at source under section 194I. However, an individual or an HUF whose books of account are NOT required to be audited u/s 44AB during immediately preceding financial year (FY) is not required to deduct tax at source u/s 194I. Thus, provisions of section 194I are not applicable to an individual/HUF whose books are not required to be audited u/s 44AB during the immediately preceding FY. When is tax deducted at source? Tax has to be deducted at source either at the time of credit of income to the payee or at the time of payment in cash/cheque/draft/any other mode, whichever is earlier. Where income is credited to any account (whether called Suspense or any other name) in the books of person liable to pay such rent, such credit shall be deemed to be credit of such income to the account of the payee. However, tax cannot be deducted until identity of the person in whose hands it is includible as income can be ascertained – Industrial Development Bank of India Vs ITO [2006] 10 SOT 497/104 TTJ 230 (Mum). At what rate is the tax deductible at source? For use of any machinery/plant/equipment @2% For use of any land/building/furniture/fittings @10% Is there any threshold limit for non-deduction of tax at source? Yes, tax at source u/s 194I is not deductible if the amount of rent credited/paid during the FY does not exceed Rs.1,80,000. When the amount credited/paid exceeds the threshold limit, tax is deductible on the entire amount credited/paid during the FY at the specified rate as applicable.

There are different rates applicable for tax deduction under section 194I for rent income from different assets. TDS rate for payment to use of plant and machinery / equipment: 2% TDS rate for any other assets like building, house, vehicle, furniture, fitting etc. : 10%

Rent. under section 194-I (a) 2% for the use of any machinery or plant or equipment; and (b) 10% for the use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings

Any person, other than an individual or a HUF, who is responsible for paying to a resident any income by way of rent shall, at the time of credit of such income to the account of the payee or at the time of payment, whichever is earlier, deduct income-tax at the following rates - (a) For the use of any machinery, plant or equipment - 2% (b) For the use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings - 10%

nature of payment – Rent (194I) (a) Rent of Plant Machinery or equipment 2% (b) Rent of Land, Building or furniture to an individual and Hindu undivided family. 10%

Hie Uma, **The rates of TDS in case of rent shall be as under:** Nature of payment – Rent (194I) (a) Rent of Plant Machinery or equipment 2% (b) Rent of Land, Building or furniture to an individual and Hindu undivided family. 10% (c) Rent of land, Building or furniture to a person other than an individual or Hindu Undivided Family. 10%