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TDS on Rent: Rates, ₹50,000 Limit and Calculator

TDS on rent applies once rent crosses ₹50,000 for a month. Businesses deduct 10% on rent for land and buildings (2% for plant and machinery) under Section 194I, and individual tenants who are not under tax audit deduct 2% once a year under Section 194-IB. Rent paid to an NRI landlord has no threshold.

Section 194I rate page →

Quick answer (FY 2025-26 and FY 2026-27)

TDS rate
10% / 2%
Threshold
Rent above ₹50,000 for a month or part of a month

TDS on rent: rate chart

Payment Section (1961 Act) New section (2025 Act) Rate Threshold
Rent of land, building, office, shop, furniture or fittings paid by a business 194I 393(1), Sl. No. 2(ii) 10% ₹50,000 a month
Rent of plant, machinery or equipment paid by a business 194I 393(1), Sl. No. 2(ii) 2% ₹50,000 a month
Rent paid by a salaried or other individual/HUF not under tax audit 194-IB 393(1), Sl. No. 2(i) 2% ₹50,000 a month
Rent paid to a non-resident (NRI) landlord 195 393(2) 30% + surcharge + 4% cess No threshold

TDS on rent limit for FY 2025-26 and FY 2026-27

From 1 April 2025 the limit is ₹50,000 for a month or part of a month, for both 194I and 194-IB. The old annual limit of ₹2,40,000 under 194I no longer applies, so a business paying ₹45,000 a month (₹5.4 lakh a year) now deducts no TDS, while one paying ₹60,000 a month deducts 10% on every month's rent.

From 1 April 2026 the Income-tax Act, 2025 replaces the 1961 Act. Rent TDS is now in the Section 393(1) table, but the rates and the ₹50,000 limit carried over unchanged.

Which section applies: 194I or 194-IB?

Companies, firms, LLPs and individuals or HUFs whose accounts were audited in the previous year deduct under 194I, every month, and file the TDS return in Form 26Q using a TAN.

Salaried tenants and other individuals or HUFs not under audit use 194-IB. They deduct 2% only once, from the rent for the last month of the year or tenancy, pay it with Form 26QC using their PAN (no TAN), and give the landlord Form 16C.

Is TDS on rent deducted on GST?

No, where GST is shown separately on the rent invoice. CBDT Circular No. 23/2017 says TDS is deducted on the rent excluding GST. A refundable security deposit is not rent and does not attract TDS.

TDS on rent calculator

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TDS amount ₹0

For 194-IB the deduction cannot exceed the rent for the last month of the year or tenancy.

Frequently Asked Questions

What is the TDS rate on rent?
10% on rent for land, buildings and furniture and 2% on plant and machinery under 194I. Individual tenants not under audit deduct 2% under 194-IB.
What is the TDS on rent limit for FY 2026-27?
Rent above ₹50,000 for a month or part of a month, under both 194I and 194-IB. The old ₹2,40,000 annual limit ended on 31 March 2025.
Does a salaried tenant have to deduct TDS on house rent?
Yes, if rent is more than ₹50,000 a month. The tenant deducts 2% once, from the last month's rent, and pays it with Form 26QC. No TAN is needed.
Is TDS on rent deducted every month?
Under 194I, yes, on each month's rent above ₹50,000. Under 194-IB it is deducted only once a year.
Is TDS on rent calculated on the amount including GST?
No. If GST is shown separately, TDS is deducted on rent excluding GST.
What is the new section for TDS on rent under the Income-tax Act 2025?
From 1 April 2026, rent TDS falls under Section 393(1) of the Income-tax Act, 2025: Table Sl. No. 2(ii) for old 194I and Sl. No. 2(i) for old 194-IB.
What is the TDS on rent paid to an NRI?
Rent paid to a non-resident landlord attracts TDS at 30% plus surcharge and 4% cess under old Section 195 (now 393(2)), with no threshold. The tenant needs a TAN.
What if the landlord has no PAN?
TDS is deducted at 20% under 194I. Under 194-IB the rate is 20% but the deduction cannot exceed the last month's rent.
What is the due date for depositing TDS on rent?
By the 7th of the following month. For tax deducted in March, the due date is 30 April. Tax deducted under 194-IB by individual tenants is paid with Form 26QC within 30 days from the end of the month of deduction.
What happens if TDS on rent is not deducted or deposited on time?
Interest is charged at 1% a month (or part of a month) from the date TDS was deductible until it is deducted, and 1.5% a month from deduction until deposit. Late filing fees, penalties and disallowance of the expense can also apply.
Which TDS return and certificate apply to TDS on rent?
Deductors with a TAN file a quarterly return in Form 26Q (Form 27Q for payments to non-residents) and issue Form 16A to the payee each quarter. Individual tenants under 194-IB use Form 26QC and issue Form 16C.
How can the payee check the TDS deducted?
In Form 26AS and the Annual Information Statement (AIS) on the income tax portal. The TDS is then claimed as a credit against tax in the income tax return, and any excess is refunded.
Did the Income-tax Act 2025 change TDS rates from April 2026?
No. From 1 April 2026 the new Act renumbered the provisions (TDS is mainly in Sections 392 and 393), but the rates and thresholds carried over. Returns and challans for payments from that date use the new section references.

New section references are to the Income-tax Act, 2025, in force from 1 April 2026. Verify the table serial number against the official text before quoting it in a return or notice reply.

Section-wise details

Section 194I
Rent
Section 194-IB
Rent by Individuals & HUFs

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