Form 26QC
An explanation on Form 26QC
In this post, we look at the Form 26QC: TDS on Rent of Property. Let’s look at each section in more detail:
What is form 26QC?
The Form 26QC is a report card that reveals how much tax has been deducted from your salary every three months. It’s important because it informs the government how much tax has been taken from your salary.
This form needs you to provide information about how much salary you have paid to your employees and how much tax you have deducted from their pay. If you haven’t taken out enough tax or nothing at all, you need to clarify why.
This form has two parts. Part one, Annexure I, contains information regarding the money you’ve paid and the tax you’ve deducted. Part two, known as Annexure II, includes details on your salary for the year and how much tax you still have to pay.
Who needs to deduct & file form 26QC?
The property’s tenant, who pays rent to the resident landlord, must file this form. Also, TDS is deducted at 5% of the tenant’s total rent payments.
What is the tax rate and threshold limit under 26QC
The tax rate and threshold limit under 26QC are:
TDS Rate:
The TDS rate under Section 194-IB is 5% for payments made after June 1, 2017. For FY 2020-21, because of COVID-19, the TDS rate under section 194-IB was temporarily reduced to 3.75% for payments from 14 May 2020 to 31 March 2021.
Threshold Limit:
Individuals and Hindu Undivided Families (HUFs) who pay rent of Rs 50,000 or more are liable to deduct TDS at a 5% rate under Section 194-IB.
A challan cum statement under Form 26QC must be filed for rent payments made under section 194-IB within 30 days of the end of the month in which TDS was deducted.
When to deduct TDS?
You have to deduct TDS while paying your rent. However, you usually have 30 days after the end of the month you made the deduction to pay the TDS.
Also, you have 30 days to file Form 26QC from:
- At the end of the financial year.
- The day on which the property is no longer occupied.
- The day on which a rent arrangement is terminated.
When to file form 26QC?
TDS on rent must be paid within 30 days of the end of the month in which the deduction was made. However, the tenant may file Form 26QC within 30 days after the end of the financial year, which is the day the property is vacated or the rent arrangement is terminated.
Details for filing form 26QC
The following are the necessary details for filling out Form 26QS:
- Tenant’s PAN and Name
- Landlord PAN and tenant/landlord address.
- Address of Rented Property
- Type of Asset (building, land, or both)
- Tenant and Landlord’s Mobile Numbers and Email ID
- tenancy period (number of months).
- Total rent due and last month’s rent paid.
- Date of Payment and Tax Deduction
- Bank Payment Details
Steps to file form 26QC
Below are the steps for filing Form 26QC online:
1, Visit the TIN website. In the portal’s menu bar, select “TDS on rent of property” under the services menu.
2, After selecting TDS on rent of property, scroll down the page and select the online Form to submit the TDS on the property.
3, Under e-payment of taxes, select TDS on rent of property and then click proceed.
4, Form 26QC is divided into four parts; you must read each carefully before filling in the details.
Form 16C Certificate for TDS Deduction to Payee
The Indian government has introduced Form 16C, a new TDS certificate. It shows how much TDS the person/HUF deducted from the rent at a rate of 5% (under Section 194IB).It is very similar to Forms 16 and 16A, which are used to report salaries and other payments, etc.
Within 15 days of the due date for submitting the challan cum statement in Form 26QC, the person deducting TDS from the rent must submit Form 16C to the payee.
Penalty for Delay/Non-Filing of Form 26QC
Late filing of Form 26QC has the following penalties:
1, You will be charged 1% interest for each month you delay deducting the tax. If the tax is deducted but not deposited, the penalty is 1.5% for one month.
2, If Form 26QC is not filed within one year of the due date, the tenant would face a penalty ranging from Rs. 10,000 to Rs. 1,00,000.
3, A late filing fee of Rs. 200 per day applies to Form 26QC. The penalty for the delay in issuing Form 16C is Rs. 100 per day.
This concludes our blog post on Form 26QC: TDS on Rent of Property. If you have any additional questions or concerns, please leave a comment.
FAQs
1.Can I submit Form 26QC after the due date?
Ans: Yes, it can be filed after the due date, which is 30 days from the end of the fiscal year. However, the tenant of the property will be liable for paying a fee of Rs. 200 every day.
2.Which form should be filed if the landlord is not a resident of India?
Ans: If the landlord of the property is non-resident, the renter must file Form 27Q regardless of rent payment. Form 27Q should be filed quarterly, not yearly.
3.What's the difference between Forms 26QB and 26QC?
Ans: Form 26QB is a challan-cum statement for TDS on the sale of property. While Form 26QC is a TDS statement based on the property’s rent.
