TDS
TDS on Rent Paid by Individuals/HUF — Section 194IB
Section 194IB requires 2% TDS on rent above ₹50,000/month when the tenant is an individual or HUF not subject to tax audit — common when renting a flat or shop as an individual. Filed via a consolidated Form 141, not a numeric payment code.
This section applies specifically to individuals or HUFs paying rent who aren't otherwise liable to a tax audit — for example, a salaried person renting a flat, or a small proprietor not subject to audit renting a shop. If you're liable to tax audit, you'd use Section 194I instead, even for the same kind of payment.
Unlike most TDS sections, this one isn't deducted every month by default — it's typically deducted once, at the time of credit or payment of rent for the last month of the financial year, or the last month of the tenancy if it ends earlier. It's also filed differently: via a challan-cum-statement rather than a routine periodic TDS return.
Under the Income-tax Act, 2025, the old forms for this and similar one-off deductions (26QB, 26QC, 26QD, 26QE) are consolidated into a single Form 141, filed separately from the regular quarterly TDS return, rather than referenced by a numeric payment code.
Worked example
On a ₹65,000.00 payment at 2%, TDS is ₹1,300.00 and the net payment is ₹63,700.00. A ₹65,000/month flat rented by a salaried individual: since it exceeds ₹50,000/month, 2% TDS applies on the year's rent, typically deducted once — from the last month's rent payment or at the end of the tenancy, whichever comes first.
Frequently asked questions
Do I deduct this every month like other TDS sections?
No — it's typically deducted once, at the time of paying or crediting rent for the last month of the financial year (or the last month of the tenancy, if earlier), rather than monthly throughout the year.
What form do I use to file this?
Historically Form 26QC — under the Income-tax Act, 2025, this and similar single-transaction TDS filings are consolidated into Form 141, filed separately from the regular quarterly TDS return.
Do I need the landlord's PAN?
Yes. Without it, the rate rises to 20% (Section 206AA), though it's capped at the amount of the last month's rent if that's less than the calculated TDS.