TDS on Rent Calculator India 2026 - Section 194-IB, 194-I, Form 26QC | Free Tool
TDS on Rent Calculator
Calculate TDS under Section 194-IB & 194-I - avoid ₹10,000+ penalty
Understanding TDS on Rent - Sections 194-IB vs 194-I
Under the Income Tax Act, 1961, tenants must deduct TDS (Tax Deducted at Source) on rent payments. The applicable section depends on who is paying the rent and how much rent is being paid. Getting this wrong can lead to penalties up to ₹10,000 under Section 271H, plus interest under Section 201(1A).
Section 194-IB: For Individuals & HUF (Not Subject to Tax Audit)
This section applies when an individual or HUF (not required to get accounts audited) pays rent exceeding ₹50,000 per month for land, building, or furniture.
- TDS Rate: 5% of the rent (2% if landlord has no PAN - actually 20% u/s 206AA)
- Threshold: ₹50,000 per month (₹6,00,000 per year)
- When to deduct: At the time of credit of rent for the last month of the financial year (March) OR at the time of payment, whichever is earlier
- Form to file: Form 26QC (Challan-cum-Statement)
- Due date: Within 30 days from the end of the month in which rent is credited/paid
- Certificate to landlord: Form 16C (download from TRACES within 15 days of filing 26QC)
Section 194-I: For Businesses, Companies & Tax-Audit Cases
This section applies to all other tenants - companies, firms, individuals subject to tax audit, etc.
- TDS Rate: 10% for land/building/furniture, 2% for plant & machinery
- Threshold: ₹2,40,000 per year (₹20,000 per month average)
- When to deduct: At the time of credit OR payment, whichever is earlier
- Form to file: Form 26Q (quarterly TDS return)
- Due date: 7th of the month following the quarter
- Certificate: Form 16 (issued quarterly)
Real Example: ₹60,000 Monthly Rent (Individual Tenant)
Let's say you're an individual paying ₹60,000/month rent in Mumbai for FY 2025-26:
- Annual Rent: ₹60,000 × 12 = ₹7,20,000
- Exceeds ₹50,000/month threshold? YES → Section 194-IB applies
- TDS @ 5% on ₹7,20,000 = 36,000
- Net rent you actually pay to landlord: ₹6,84,000
- TDS you deposit to government via Form 26QC: 36,000
Penalties for Non-Compliance (Don't Ignore This!)
- Interest u/s 201(1A): 1% per month (or part) from date TDS was deductible till date of actual deduction, plus 1.5% per month from deduction date till payment date
- Fee u/s 234E: ₹200 per day of delay in filing TDS return (capped at TDS amount)
- Penalty u/s 271H: ₹10,000 to ₹1,00,000 for failure to file TDS return
- Disallowance u/s 40(a)(ia): 30% of the rent expense may be disallowed as business expense if TDS not deducted
Frequently Asked Questions
Do I need to deduct TDS if my rent is ₹45,000/month?
No. Under Section 194-IB, TDS is only required if monthly rent exceeds ₹50,000. At ₹45,000/month, you're below the threshold. However, if you're a business (Section 194-I), the annual threshold is ₹2,40,000 - so ₹45,000 × 12 = ₹5,40,000 would attract TDS.
What if I'm paying rent to my parents?
TDS rules apply regardless of relationship. If you're paying rent to parents exceeding ₹50,000/month (as individual) or ₹2,40,000/year (as business), TDS must be deducted. The rent should also be declared as "Income from House Property" in their ITR. Ensure proper rent agreement and actual bank transfers for HRA claims.
How do I file Form 26QC?
Form 26QC is filed online on the Income Tax e-filing portal (incometax.gov.in). You need: landlord's PAN, address, rent amount, TDS amount, and your own PAN. Payment is made via challan ITNS 281. After filing, download Form 16C from TRACES (traces.tdscpc.gov.in) and give it to your landlord.
Can the landlord claim credit for TDS deducted?
Yes, absolutely. The TDS you deposit appears in the landlord's Form 26AS (Tax Credit Statement). They can claim this as tax credit while filing their ITR. That's why giving them Form 16C is important - it's their proof of TDS deduction.
What if I forgot to deduct TDS last year?
You can still deduct and deposit TDS with interest u/s 201(1A): 1% per month from the date it was deductible. File a belated TDS return (Form 26Q/26QC) with late fees. It's better to do this voluntarily than wait for an income tax notice, which can attract additional penalties.
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