If you pay rent exceeding ₹50,000 per month, you are required to deduct TDS at the time of payment under Section 194-IB. This applies to individual and HUF tenants — not just businesses. Many people are unaware of this obligation and face demands with interest.
TDS Rate Under Section 194-IB
TDS must be deducted at 5% of the annual rent amount. However, for rent paid to a resident owner, you deduct at 2% if the owner provides PAN. Deduct at 20% if no PAN is provided. The deduction is made only once — at the time of last month’s rent payment or when vacating.
How to Deposit and File
Unlike regular TDS, rent TDS under Section 194-IB is paid using Form 26QC (a challan-cum-statement) on the TIN-NSDL portal within 30 days from the end of the month in which deduction was made. No separate quarterly TDS return is required — Form 26QC itself is the return.
TDS Certificate to Landlord
After depositing TDS, you must issue Form 16C to the landlord within 15 days from the due date of 26QC filing. Failure to issue Form 16C attracts ₹100/day penalty.
📌 Need Help With This?
Our CA experts can help you with all aspects covered in this article. Get a free consultation today.