As per the provisions of section 194-I, the tax is to be deducted at source @10% in respect of income by the way of rent for any use of land or building or furniture or fixture etc. The proviso to section 194-I further provides that no tax be deducted in case the total rent paid in a financial year does not exceed Rs. 1,80,000/-. Considering the general basic exemption limit of Rs. 2,50,000/- for the Assessment year 2017-18 and for Senior Citizens of Rs. 3,00,000/- the present limit of Rs. 1,80,000/- seems to be too low, especially for those Senior Citizens whose source of income is only rent. Hence, the limit of Rs. 1,80,000/- under section 194-I may be increased appropriately.
Considering the increase in the basic exemption limit for general assessees and senior citizens, it is suggested that the exemption limit of Rs. 1,80,000 in respect of TDS on rent under section 194-I be enhanced appropriately.
(SUGGESTIONS FOR RATIONALIZATION OF THE PROVISIONS OF DIRECT TAX LAWS)