TDS
TDS on Rent of Land, Building or Furniture — Section 194I
Section 194I requires 10% TDS on rent for land, buildings or furniture once it exceeds ₹50,000 in any month — the section a business uses for office or shop rent; individuals/HUF not liable to tax audit use Section 194IB instead.
This is the rate a business — a company, firm, or an individual/HUF liable to tax audit — uses when paying rent for land, a building, office space, a shop, or furniture and fittings. An individual or HUF tenant not liable to tax audit uses Section 194IB instead, even though that section's threshold is now the same ₹50,000/month figure.
Like the plant/machinery rate under the same section, this changed from an annual ₹2,40,000 threshold to a monthly ₹50,000 test effective 1 April 2025 — evaluated per month, on the full month's rent once crossed.
From FY 2026-27, this is Section 393(1), Table 1, Sl. 2(ii)(b) under the Income-tax Act, 2025, filed against payment code 1009.
Worked example
On a ₹80,000.00 payment at 10%, TDS is ₹8,000.00 and the net payment is ₹72,000.00. ₹80,000/month office rent paid by a company: 10% TDS applies since it crosses ₹50,000 for the month, deducted from the payment to the landlord.
Frequently asked questions
How do I know whether to use 194I or 194IB?
194I is for businesses — companies, firms, and individuals/HUF liable to tax audit. 194IB is for individuals/HUF not liable to tax audit (typically salaried individuals or small proprietors renting a flat or shop). Both now share the same ₹50,000/month threshold, but the deduction and filing mechanics differ.
Does it matter if the landlord is an individual or a company?
No — the rate and threshold depend on who's paying the rent (the tenant), not who's receiving it. The same 10% rate applies whether the landlord is an individual or a company.
Is the ₹50,000 threshold tested annually or monthly?
Monthly, since 1 April 2025 — a change from the old annual ₹2,40,000 test. Each month's rent is checked against ₹50,000 independently.