TDS on rent payments.
Annual TDS on rent
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Annual rent
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Your breakdown
Updates live as you type| Tenant | Section | Rate | Annual TDS |
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Two different sections, two different rules
TDS on rent in India is governed by two provisions that people constantly mix up. Section 194I applies when a business or professional pays rent, and the rate is 10% once the annual rent to a single landlord crosses ₹2.4 lakh. Section 194-IB applies to an individual or HUF not subject to a tax audit, typically a salaried tenant in a private flat, and it kicks in only when the monthly rent exceeds ₹50,000. The 194-IB rate was cut from 5% to 2% with effect from 1 October 2024, a change many tenants still have not registered. This calculator picks the right section based on the tenant type you select and applies the correct threshold and rate.
Worked example: ₹60,000 a month, two kinds of tenant
The default rent of ₹60,000 a month, or ₹7.2 lakh a year, is above both thresholds, which makes it a clean illustration of how differently the two sections bite on the very same rent.
On identical rent, the salaried tenant deducts ₹14,400 for the year while a company deducts ₹72,000. The gap is the whole point of having two sections: 194I assumes a deduct-at-source machinery a business already runs, while 194-IB is a light-touch rule so ordinary tenants are not forced into monthly compliance.
The compliance differs more than the rate
This is where the two sections really diverge, and where tenants get into trouble. Under 194I, the business needs a TAN, deducts every month, deposits TDS by the 7th of the next month, and files quarterly returns. Under 194-IB, an individual tenant does not need a TAN at all. You deduct just once a year, in the last month of the tenancy or the last month of the financial year, whichever comes first, and you pay it using a single challan-cum-statement, Form 26QC, within 30 days of the end of that month. You then hand the landlord a Form 16C as proof. A common and expensive mistake: deducting 194-IB monthly the way 194I works, or forgetting it entirely and getting hit with interest at 1% to 1.5% a month plus a late-filing fee.
How the credit reaches the landlord
TDS is not a cost to the landlord; it is tax paid on the landlord’s behalf, and it has to show up in their records to be useful. After you deduct and deposit it, the amount flows into the landlord’s Form 26AS and Annual Information Statement, where they claim it as a credit against their own tax when filing their return. The paperwork that makes this happen differs by section. Under 194-IB you file Form 26QC, the challan-cum-statement, within 30 days from the end of the month in which you deducted, and then download and give the landlord a Form 16C as the TDS certificate. Under 194I the business files quarterly TDS returns and issues Form 16A every quarter. Get the landlord’s PAN exactly right when you file, because a wrong PAN parks the credit in the wrong account and the landlord will chase you to correct it. If you are the landlord, check your 26AS before filing to confirm the tenant actually deposited what they deducted; tenants sometimes deduct and forget to pay, leaving you unable to claim the credit. A late deposit attracts interest of 1% a month for late deduction and 1.5% a month for late payment, plus a fee of ₹200 a day under Section 234E for a late statement, so the timelines are worth diarising.
What if my landlord does not have a PAN?
Then the rate jumps. Under both sections, if the landlord fails to furnish a valid PAN, you must deduct at 20% instead of the normal 2% or 10%, subject to the rent ceiling. For 194-IB there is a further safeguard: the higher 20% deduction cannot exceed the rent of the last month of the tenancy or of the financial year, so a tenant is not left out of pocket. So always collect the landlord’s PAN before paying rent; it protects both of you and keeps the deduction at the correct lower rate.
I pay ₹48,000 rent. Do I deduct any TDS?
No. As an individual, 194-IB only applies when monthly rent exceeds ₹50,000, so at ₹48,000 you have no TDS obligation at all. The threshold is a hard cut-off, not a graduated one. If you later raise the rent above ₹50,000 mid-year, the deduction obligation applies for that year’s rent.