Why there are 2 Rates given for Rent in Sec 194I?

Question

Accepted Answer

There are 2 rates given for rent in Sec 194I to differentiate between rent paid for plant/machinery and rent paid for land/building.

Sec 194I of the Income Tax Act deals with the deduction of tax at source on rent payments.
The two rates are 10% and 2% depending on the type of rent paid.
The 10% rate is applicable when the rent is paid for the use of plant, machinery, or equipment.
The 2% rate is applicable when the rent is paid for the use of land, building, or furniture.
This differentiation helps in determining the appropriate tax rate for different types of rent payments.
For example, if a company rents a building, it will deduct tax at a rate of 2% on the rent paid.
However, if the company rents machinery, it will deduct tax at a rate of 10% on the rent paid.

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