Note: If PAN not furnished, TDS @ 20% under section 206AA.
⚠️ Common exam mistakes
Applying the rate of 10% to plant/machinery — the correct rate is 2%.
Using an annual threshold — section 194-I uses ₹ 50,000 per month or part of a month.
Forgetting the section 206AA override (20%) when PAN is not furnished.
Bare-Act text Section 194-I · Income-tax Act, 1961 · click to expand
Section 194-I - Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any income by way of rent, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of— (a) two per cent for the use of any machinery or plant or equipment; and (b) ten per cent for the use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings.
Provided that no deduction shall be made under this section where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year by the aforesaid person to the account of, or to, the payee, does not exceed fifty thousand rupees for a month or part of a month.