TDS on rent above ₹50,000/month: what tenants don't know and landlords won't tell you.
"I pay ₹55,000 rent per month. My landlord says I don't need to deduct TDS. Is he right?"
Your landlord is wrong – and it’s your liability, not his. Section 194-IB states that anyone who is not under tax audit and any HUF is obligated to deduct TDS @ 5% from the rent paid to a resident if the monthly rent is more than ₹50,000.
So, you need to pay TDS, fill up Form 26QC in 30 days after paying rent in the financial year and give Form 16C to your landlord. Failure to do so means TDS default and also interest on that.
However, your landlord does not have the right to do so on your behalf. It is your duty. In reality, hardly any tenant in India abides by this requirement. IT department is now focusing on higher rent transactions.
What the law says — exact provisions
Section 194-IB
TDS @ 5% on rent > ₹50,000/month for individuals/HUF (non-tax audit). Deductible once at year-end or on vacating.
Form 26QC
Challan-cum-statement to be filed by tenant on TIN within 30 days of end of FY or lease.
Form 16C
TDS certificate to be issued by tenant to landlord within 15 days of Form 26QC filing.
Section 201
Failure to deduct TDS: interest @ 1.5%/month from deduction date + penalty up to TDS amount.
CA Rishabh's verdict
Bottom line
Rent above ₹50,000/month? Deduct 5% TDS in March, file Form 26QC, give Form 16C to landlord. This is your obligation, not optional. The demand for non-compliance comes with interest.