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Paying rent to Non-Resident. Are you deducting TDS?

Updated: Nov 13, 2019

Are you paying rent to a landlord who is a non-resident and not deducting TDS on it?

You are in serious default under the Income Tax Act 1961. Yes, you heard that right. You are now thinking that you are just another salaried employee or a small business man who is not required to even hold TAN for deducting TDS, then why do you need to deduct TDS.

The answer to this is in sections 195. As per section 195, any payment made to a non-resident irrespective of the amount, you are liable to withhold tax from the payment.

So if you are paying rent even of Rs.10,000 a month, you need to deduct TDS @ 30% plus applicable surcharge and cess.

It will be your liability to ascertain if the landlord is non-resident or not.

How to deduct TDS and deposit it?

For deducting TDS you will be first required to obtain tax deduction account number (TAN), which can be done from any NSDL centre. Once you have a TAN, you can deduct TDS and you are liable to deposit it on a monthly basis by 7th of next month. Further, you are also required to file TDS return on a quarterly basis disclosing the rent paid, TDS deducted and TDS deposited.

Worried about how to handle this, you can contact us for support and we will help you in everything from getting a TAN to filing your quarterly TDS returns.


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