TDS on Rent — Rate, Threshold & How to Deduct
Updated June 2026 · VerifiedWhat Is the TDS Rate on Rent?
The TDS rate on rent depends on the type of deductor and property:
| Scenario | Section (New / Legacy) | Threshold | TDS Rate |
|---|---|---|---|
| Rent of land, building, furniture by business/professional | 393 (earlier 194-I) | ₹2,40,000/year | 10% |
| Rent of plant & machinery | 393 (earlier 194-I) | ₹2,40,000/year | 2% |
| Rent paid by individual/HUF (non-audit cases) | 393 (earlier 194-IB) | ₹50,000/month | 5% |
Who Must Deduct TDS on Rent?
- Businesses and professionals paying rent above ₹2,40,000/year must deduct TDS under Section 393.
- Individuals and HUFs (not liable to tax audit) paying monthly rent exceeding ₹50,000 must deduct TDS at 5%.
- Government entities, companies, trusts, and other bodies are also liable to deduct TDS on rent.
How to Deduct and Deposit TDS on Rent?
- Obtain TAN: A Tax Deduction Account Number is mandatory for deducting TDS (except for individuals/HUFs under the 194-IB provision who can use PAN).
- Deduct TDS: At the time of credit or payment, whichever is earlier.
- Deposit TDS: By the 7th of the following month using Challan 281.
- File TDS return: Quarterly in Form 140 (earlier Form 26Q) for non-salary payments.
- Issue TDS certificate: Form 16A to the landlord within 15 days of the due date of filing the TDS return.
What Is the Threshold for TDS on Rent?
TDS on rent applies only when the aggregate rent paid or credited during the Tax Year exceeds the threshold limit. For most deductors, the threshold is ₹2,40,000 per year. For individuals/HUFs not subject to audit, TDS under the erstwhile 194-IB applies when monthly rent exceeds ₹50,000.
What Form to File for Rent TDS?
Rent TDS is reported in the quarterly TDS return:
- Form 140 (earlier Form 26Q) — for non-salary TDS including rent, filed quarterly.
- Individuals/HUFs under the erstwhile 194-IB provision file Form 26QC (challan-cum-statement) within 30 days of the end of the month in which TDS is deducted.
Frequently Asked Questions
Is TDS on rent applicable if I pay rent below ₹2,40,000 per year?
No. If the total rent paid during the Tax Year does not exceed ₹2,40,000, TDS is not required to be deducted.
What if my landlord does not have a PAN?
If the landlord does not furnish PAN, TDS must be deducted at 20% instead of the normal rate of 10% or 2%.
Can a salaried individual deduct TDS on rent?
Yes. If a salaried individual (not liable to tax audit) pays monthly rent exceeding ₹50,000, they must deduct TDS at 5% under the erstwhile Section 194-IB provision (now under Section 393).
Is GST included in the rent amount for TDS calculation?
No. TDS on rent is to be deducted on the rent amount excluding GST, provided GST is separately mentioned in the invoice.
What is the penalty for not deducting TDS on rent?
If TDS is not deducted, the entire rent payment may be disallowed as a business expense (30% disallowance). Additionally, interest at 1% per month is levied for non-deduction and 1.5% per month for non-deposit of TDS.