Everything you should know about relocating to India in 2020: 1) India amends its Citizenship Act; 2) Tax Deduction at Source (TDS) on house rent; 3) Salient features of the new ACT
India Amends its Citizenship Act
On 11th December 2019 – The Parliament of India passed the Citizenship (Amendment) Act 2019. This amendment to the 1955 Citizenship act makes those refugees belonging to minority religions and specifically Hindus, Sikhs, Buddhists, Jains, Parsis and Christians, who may have come to India as refugees before 31st December 2014 from the three Islamic countries of Afghanistan, Bangladesh and Pakistan, eligible for Indian citizenship. The Act has reduced the minimum residency period for the above category of immigrants to six years from the earlier twelve years to apply for citizenship.
Tax Deduction at Source (TDS) on House Rent
Finance Act 2017 has mandated that tax should be deducted at source on housing rent and is liable to be deducted by all Individuals (including foreigners) who are responsible for paying house rent as a lessee where the monthly rent exceeds INR 50,000/-.
All the rent transactions from June 1, 2017, would require deduction of tax at source at the rate of 5% of the rent amount should be deducted by the tenant of the property at the time of payment of rent (to landlord/lessor). Tax so deducted should be deposited with the Government immediately and within thirty days and a tax deduction certificate be provided to the landlord along with filing of tax returns.
Salient Features of the New ACT
- All individuals paying monthly rent to an Indian resident in excess of Rs. 50,000 are liable to deduct TDS @ 5% from the rent payment made to the Landlord.
- Ensure tax is deposited against the correct Permanent Account Number (PAN) of the Landlord.
- PAN of the Landlord as well as Tenant should be provided at the time of filing of chalans as well as any returns. Ensure that both the PAN numbers are correct at the time of filing of the returns.
- Share and furnish TDS certificate in Form 16C and issue to the Lessor.
- The Lessor must also provide the correct PAN to the Tenant and also must verify deposit of taxes deducted online.
- The landlord must seek a copy of the Form 16C from the tenant.
- If the above is not done then it would amount to tax evasion. In any case, the TDS at the rate of 5% for the whole financial year must be deposited with the Government of India by or before 31st of March along with delayed interest /penalties.
The Complete Guide on Relocating to India you can find here!
IKAN Relocations, a Mobility Management company, has been a brand in existence since 1996 and is a founding partner of RELOC8 Asia Pacific Group, a regional network of quality relocation and immigration service providers. IKAN offers end to end mobility solutions including Destination Services, Immigration Support and Household Goods Move Management, to many blue-chip companies on a global, regional and local basis, aiming at supporting the logistics of a global workforce in the Indian Sub-Continent region.