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Individuals and HUFs not under audit who pay rent above ₹50,000 a month must deduct TDS under Sec 194IB (now Sec 393) and file Form 26QC (now Form 141). Not deducting makes you an assessee in default.
ITR
Tenant default under Sec 194IB for high rent
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Provisions
Sec 194IB, Income-tax Act 1961 (now Sec 393, Income-tax Act 2025); Sec 201, Income-tax Act 1961 (now Sec 398, Income-tax Act 2025); Sec 234E, Income-tax Act 1961 (now Sec 427, Income-tax Act 2025)
Analysis
For FY 2025-26, the rate was 2% (reduced from 5% from 1 October 2024; check the latest notification). Example: rent of ₹60,000 for 12 months is ₹7,20,000; TDS at 2% is ₹14,400. If not deducted, you pay it with interest under Sec 201(1A) (now Sec 398(3)) and late fee for Form 26QC. Deduct from the last rent payment of the year or at vacation, as the section allows.
Close
- Work out total rent and TDS for the year
- Deduct and deposit via Form 26QC (now Form 141) on the portal
- Pay interest and any late fee
- Download and give Form 16C (now Form 132) to the landlord
- Get the landlord's PAN to avoid higher TDS
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