Sections 192 to 194 of the Income Tax Act, 1961, govern TDS (Tax Deducted at Source) on various types of payments. These sections mandate that the payer deduct TDS from the amount paid to the payee at prescribed rates, varying by payment type. TDS deductions help taxpayers meet their tax liability in advance, ensuring transparency in the income process. Check the details guide of Form 16C Income Tax here!
When deducting TDS, the payer issues a certificate to the payee, detailing the deducted amount. Form 16C serves as a certificate specifically for TDS deductions on rent payments, as outlined in Section 194IB of the Income Tax Act.
Form 16C serves as a TDS certificate under Section 194IB, specifically for high rental income groups, where rent payments exceed ₹50,000 per month. Under this section, individuals and HUFs (Hindu Undivided Families) paying rent of ₹50,000 or more must deduct TDS. Typically, TDS deduction requires TAN registration; however, Section 194IB permits individuals and HUFs to quote their PAN for a tax deduction.
Form 16C details the TDS amount deducted and issued by the payer to the rent receiver. This form simplifies compliance for taxpayers renting out properties, offering proof of the TDS deduction made on rent.
| Form | Purpose | Issued To | Mandatory for TDS | Details | Section |
| Form 16 | TDS on salary income | Employee | Yes | Salary and TDS details | Section 192 |
| Form 16A | TDS on non-salary income | Tax deductee | Yes | Only TDS details | Section 194 |
| Form 16B | TDS on sale of immovable property | Buyer | Yes | TDS details on property sale | Section 194IA |
| Form 16C | TDS on rental payments exceeding ₹50,000 | Rent receiver (landlord) | Yes | TDS details on rent payment | Section 194IB |
After deducting TDS, taxpayers must deposit it with the government within 30 days from the end of the month of deduction. The payment should include the submission of Form 26QC, which serves as a challan-cum-statement for the deducted TDS on rent payments.
Using online payment channels (such as RBI, SBI, or other authorized banks), individuals or HUFs can easily deposit the TDS electronically. This online payment process is seamless and helps maintain timely compliance with the TDS deduction rules.
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After deducting and depositing TDS, the tenant must provide Form 16C to the landlord within 15 days. Issued through the TRACES portal, this form is mandatory to avoid late penalties.
Failure to issue Form 16C on time results in a fine of ₹100 per day of delay. Therefore, the deductor needs to adhere to this timeframe to avoid any late fees and ensure smooth compliance.
Download Form 16C from the TRACES (TDS Reconciliation Analysis and Correction Enabling System) portal by following these steps:
The downloaded Form 16C will contain comprehensive details, including the deductor’s name, father’s name, and additional TDS details required for record-keeping.
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Form 16C is a critical form for tenants making high-value rental payments, as it records the TDS deducted on rent, ensuring compliance under Section 194IB of the Income Tax Act. By issuing Form 16C, both tenants and landlords fulfill their obligations to report income and tax deductions transparently. Adhering to due dates and submission requirements ensures that the rent payer remains compliant while providing the rent receiver with accurate records of TDS deductions.
Individuals and HUFs paying rent of ₹50,000 or more monthly must deduct TDS under Section 194IB, without the need for TAN registration.
Failure to issue Form 16C within the specified 15-day period after TDS deposit can lead to a fine of ₹100 per day of delay.
Yes, Form 16C can be downloaded from the TRACES portal by providing necessary details and completing the online request process.
TDS must be deposited within 30 days following the end of the month in which it was deducted.
No, taxpayers can quote their PAN instead of TAN for TDS deductions under Section 194IB, making compliance more accessible.
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