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194-IB

Section 194-IB TDS Rate FY 2026-27

TDS on rent paid by individuals and hufs not covered by 194i: rate, threshold, who deducts, and the new section number under the Income-tax Act 2025.

Quick answer

TDS rate
2%
Threshold
Rent above ₹50,000 for a month or part of a month
Old section (1961 Act)
Section 194-IB
New section (2025 Act, from 1 Apr 2026)
Section 393(1), Table Sl. No. 2(i)
Without PAN
20%, but the deduction cannot exceed the rent for the last month of the year or tenancy.

What changed: The rate was 5% until 30 September 2024 and is 2% from 1 October 2024.

194-IB TDS rate chart

Nature of payment Rate
Rent paid by an individual or HUF not liable to tax audit 2%

Who deducts and when

Who has to deduct

Individuals and HUFs who are not required to deduct under Section 194I (that is, not liable to tax audit), such as salaried tenants paying high rent.

When to deduct

Once a year: on the rent for the last month of the year, or the last month of the tenancy if it ends earlier.

Points to remember

  • No TAN is needed. Tax is paid using the challan-cum-statement Form 26QC.
  • Deduction is made once, not monthly, on the rent for the last month of the year or tenancy.
  • Salaried tenants claiming HRA exemption must still deduct TDS if rent exceeds ₹50,000 a month.

Worked example

A salaried tenant pays ₹60,000 a month for a flat, which is ₹7,20,000 for the year. The TDS is deducted from the last month's rent.

TDS at 2% = ₹14,400.

Section 194-IB TDS calculator

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Applicable rate –
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Net amount payable ₹0

Frequently Asked Questions

What is the TDS rate under Section 194-IB?
2% for rent paid by an individual or HUF not liable to tax audit.
What is the threshold limit for TDS under 194-IB?
Rent above ₹50,000 for a month or part of a month. The rate was 5% until 30 September 2024 and is 2% from 1 October 2024.
What is the new section for 194-IB under the Income-tax Act 2025?
From 1 April 2026 the Income-tax Act 2025 replaces the 1961 Act. TDS on rent paid by individuals and hufs not covered by 194i (old Section 194-IB) is now covered by Section 393(1), Table Sl. No. 2(i). The rate and threshold carried over unchanged.
Who has to deduct TDS under 194-IB?
Individuals and HUFs who are not required to deduct under Section 194I (that is, not liable to tax audit), such as salaried tenants paying high rent.
When should TDS under 194-IB be deducted?
Once a year: on the rent for the last month of the year, or the last month of the tenancy if it ends earlier.
What is the TDS rate under 194-IB if PAN is not available?
20%, but the deduction cannot exceed the rent for the last month of the year or tenancy.
What is the due date for depositing TDS under 194-IB?
Tax deducted under 194-IB must be paid with the challan-cum-statement within 30 days from the end of the month in which it was deducted.
What happens if TDS under 194-IB 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.
Does a salaried tenant need a TAN for 194-IB?
No. Tax deducted under 194-IB is paid with Form 26QC using the tenant's PAN. A TAN is not required.
When is TDS under 194-IB deducted?
Once a year, from the rent for the last month of the financial year or the last month of the tenancy if it ends earlier.

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

194I
Rent
194-IA
Property Purchase
194A
Interest (FD, Loans)

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)
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