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194I
Section 194I TDS Rate FY 2026-27
TDS on rent paid by businesses and audited individuals/hufs: rate, threshold, who deducts, and the new section number under the Income-tax Act 2025.
Quick answer
- TDS rate
- 2% / 10%
- Threshold
- ₹50,000 for a month or part of a month
- Old section (1961 Act)
- Section 194I
- New section (2025 Act, from 1 Apr 2026)
- Section 393(1), Table Sl. No. 2(ii)
- Without PAN
- 20% if the landlord does not furnish a valid PAN.
What changed: Until 31 March 2025 the threshold was ₹2,40,000 per year. From 1 April 2025 it is ₹50,000 for a month or part of a month.
194I TDS rate chart
| Nature of payment | Rate |
|---|---|
| Rent for plant, machinery or equipment | 2% |
| Rent for land, building (including factory building), land appurtenant to a building, furniture or fittings | 10% |
Who deducts and when
Who has to deduct
Any person other than an individual or HUF, plus individuals and HUFs whose accounts were required to be audited in the preceding year. Other individuals and HUFs paying high rent use Section 194-IB instead.
When to deduct
At the time of credit or payment, whichever is earlier.
Points to remember
- Rent includes payments under any lease, sub-lease, tenancy or arrangement for the use of land, buildings, machinery, plant, equipment, furniture or fittings.
- Where GST is shown separately in the rent agreement or invoice, TDS is generally deducted on rent excluding GST (CBDT Circular No. 23/2017).
- A refundable security deposit is not rent. An advance rent adjustable against future rent is.
Worked example
A company pays ₹75,000 a month (excluding GST) as office rent.
TDS at 10% = ₹7,500.
Section 194I TDS calculator
Runs in your browser. Check the threshold above before deducting.
Applicable rate –
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Frequently Asked Questions
What is the TDS rate under Section 194I?
2% for rent for plant, machinery or equipment; 10% for rent for land, building (including factory building), land appurtenant to a building, furniture or fittings.
What is the threshold limit for TDS under 194I?
₹50,000 for a month or part of a month. Until 31 March 2025 the threshold was ₹2,40,000 per year. From 1 April 2025 it is ₹50,000 for a month or part of a month.
What is the new section for 194I under the Income-tax Act 2025?
From 1 April 2026 the Income-tax Act 2025 replaces the 1961 Act. TDS on rent paid by businesses and audited individuals/hufs (old Section 194I) is now covered by Section 393(1), Table Sl. No. 2(ii). The rate and threshold carried over unchanged.
Who has to deduct TDS under 194I?
Any person other than an individual or HUF, plus individuals and HUFs whose accounts were required to be audited in the preceding year. Other individuals and HUFs paying high rent use Section 194-IB instead.
When should TDS under 194I be deducted?
At the time of credit or payment, whichever is earlier.
What is the TDS rate under 194I if PAN is not available?
20% if the landlord does not furnish a valid PAN.
What is the due date for depositing TDS under 194I?
Generally by the 7th of the following month. For tax deducted in March, the due date is 30 April. Government deductors paying without a challan must deposit on the same day.
What happens if TDS under 194I is not deducted or deposited on time?
Interest is charged at 1% per month (or part of a month) from the date tax was deductible to the date it is deducted, and at 1.5% per month from deduction to deposit. Late filing fees and penalties can also apply, and for a business, 30% of the expense may be disallowed.
What is the TDS on rent limit for FY 2025-26?
From 1 April 2025, TDS under 194I applies when rent exceeds ₹50,000 for a month or part of a month. The earlier ₹2,40,000 annual limit no longer applies.
Is TDS on rent deducted on GST?
Generally no. Where GST is indicated separately, TDS is deducted on the rent amount excluding GST.
Section 393 table references are based on the Income-tax Act, 2025 as published. Verify the serial number against the official text before quoting it in a return or notice reply.
Other TDS sections
TDS on common payments
TDS on Rent
10% / 2%
TDS on Salary
Slab rates (average)
TDS on Purchase of Goods
0.1%
TDS on Property Purchase
1%
TDS on Sale of Property
1% (resident) / 12.5%+ (NRI)
TDS on Commission
2%
TDS on Professional Fees
10% / 2%
TDS on Contractor Payments
1% / 2%
TDS on Partners' Remuneration
10%
TDS on FD Interest
10%
TDS on GST (TDS under GST)
2% (1% CGST + 1% SGST, or 2% IGST)
TDS on Cash Withdrawal
2% (5% for non-filers above ₹1 crore)