Withholding tax on rent: what a landlord is actually handling

Withholding tax on rent works the opposite way round to a tax added to a bill. Instead of the tenant paying extra, the tenant deducts a percentage of the rent and pays you the remainder, called the net, then remits the deducted slice to the tax office against your PAN. So the rent is unchanged and the money you receive is smaller.

The deducted amount is not lost to you. It is tax already paid on your behalf, and it counts as a credit against what you owe.

This guide explains the shape of the thing so the numbers on your bills make sense. It is not tax advice, and it deliberately states no rate. See the last section.

In this product the withholding percentage is set by the owner, not by us, and that is deliberate rather than an omission. Rates and bases are set by tax law, they change, and they are not the same for every kind of landlord or every kind of income.

A platform printing a number that a landlord then files on is doing something it has no standing to do. Ask your accountant or the Inland Revenue Department for the figure that applies to you, then set it once in your billing settings.

The same goes for which portion of a bill is assessed. We let you choose between rent only, taxable heads, or the whole bill, because that follows the income category rather than anything we get to decide.

It does: make the tenant's payable net of the withholding, show it as a clearly labelled deduction on the bill, capture the withheld amount against every payment, and keep a running record you can pull as a statement for any period.

It also generates a fiscal-year certificate on the official form, per Bikram Sambat fiscal year, enriched with both parties' PAN and the remittance challans you record.

It does not: move money to the tax office. Nothing is remitted on your behalf, and no filing happens automatically. That remains yours.

Your PAN on your profile. The certificate cannot be generated without it, and the end of a fiscal year is a bad time to discover that.

The remittance challans, recorded as they happen rather than reconstructed later: the fiscal year, challan number, deposit date, bank and amount.

The withholding statement for each period, which reconciles with the certificate for the same window.

One caution worth stating plainly: the certificate is laid out to match the official form, and that layout has not been signed off by an accountant. Have yours check it before you file on it.