As the government of India has emphasized more on tax to be deducted to ensure that the correct tax amount is deposited with the treasury of government and to avoid any loopholes for evasion of tax, under various provisions of Income Tax Act, it has become very important for the persons who are the payee of the amount to become more informed and vigilant about tax implications on the amount paid by them.
In the budget of 2017, the government inserted a new section 194IB. Under this section, any individual or HUF, who pays a rent of Rs 50,000 or above per month, will have to deduct TDS at the rate of 5% per annum. This new section has become effective from 1st June 2017.