New TCS/TDS rules

New TCSTDS rules
  • The CBDT stated that those who have not submitted income tax returns for two years will be subject to a higher TDS or TCS rate.
  • TDS or TCS will be taxed at the higher of twice the rate outlined in the applicable Income Tax Act provision or 5%.
  • The requirements of this section will apply to TDS deductions on resident payments such as shareholder dividends, service payments to vendors, and rent, but not to salaries, winners from lotteries or crossword puzzles, horse racing winnings, trust income, or cash withdrawals.
  • Additionally, a non-resident Indian (NRI) who does not have a permanent establishment in India is not subject to a higher rate of TDS.

New GST rules on Rent of residential property❗❗

Under the new Goods and Services Tax

  • GST rules, effective from 18th July 2022, a tax of 18% is now applicable to rent on residential property.
  • The tax will be charged as per the GST reverse charge mechanism (RCM), where the tenant will pay the liable GST.
  • Previously, no GST was payable on residential property rent, only rent on commercial property was taxed.
  • As per the new GST rules 2022, it is not mandatory for the landlord to be GST registered, but the tenant of the residential property has to necessarily have GST registration.

Will this effect you

  • These rules will mostly affect companies who rent residential properties, like guest houses, for employees or for any other purpose, or small businesses operating from residences or house property.
  • It will also affect business professionals carrying out their personal practice from rented residential property.