TDS on Rent Calculator India — Section 194IB & 194I

Q: When is TDS on rent applicable?

TDS on rent is applicable in two scenarios: (1) Section 194IB — if you are an individual or HUF tenant (not subject to tax audit) and your monthly rent exceeds ₹50,000, you must deduct TDS at 2% (effective 1 Oct 2024; previously 5%). (2) Section 194I — if you are a business entity or individual subject to tax audit under Section 44AB, you must deduct TDS at 10% on rent payments when annual rent exceeds ₹2,40,000.

Q: Do I need a TAN for Section 194IB?

No. Individual/HUF tenants do not need a TAN (Tax Deduction Account Number) for Section 194IB. You can file Form 26QC using only your PAN and the landlord's PAN. However, under Section 194I (business tenants), a TAN is mandatory.

Q: What if the landlord doesn't have PAN?

If the landlord does not furnish their PAN, Section 206AA mandates TDS at 20% instead of the normal 2% (Section 194IB) or 10% (Section 194I). On ₹7,80,000 annual rent, TDS jumps from ₹15,600 to ₹1,56,000. Always collect the landlord's PAN before signing the rent agreement.

Q: What is the penalty for not deducting TDS on rent?

Penalties include: (1) Interest on late deduction at 1% per month, (2) Interest on late deposit at 1.5% per month, (3) Late filing fee of ₹200/day under Section 234E (capped at TDS amount). Additionally, the rent expense deduction may be disallowed under Section 40(a)(ia).

Check if you need to deduct TDS on rent, calculate the exact amount under Section 194IB (2% for individuals, effective Oct 2024) or Section 194I (10% for businesses), understand the impact on landlords, and know the penalties for non-compliance. Updated with Finance Act 2024 rates.

Check if you need to deduct TDS on your rent payment under Section 194IB or 194I

Monthly rent

₹

Rent you pay per month to landlord (TDS threshold: ₹50,000/month for individuals)

Tenant type

Individual tenants fall under Sec 194IB; businesses under Sec 194I

—

Try another scenario

How to Use This Calculator

Do I Need to Deduct TDS? tab

Enter your monthly rent and select your tenant type (individual not under audit, or business under audit). The calculator checks whether TDS applies under Section 194IB (individuals) or Section 194I (businesses), shows the applicable rate, TDS amount, required form, and when to deduct. For individuals, the threshold is ₹50,000/month — below this, no TDS is needed.

TDS Calculation tab

Enter your monthly rent, months of tenancy, and whether the landlord has PAN. The calculator computes the exact TDS amount, net rent payable to the landlord, due dates for filing Form 26QC, and penalty amounts for late deduction or deposit. Without landlord PAN, the TDS rate jumps from 2% to 20% — a significant difference.

Landlord Impact tab

For landlords: enter your monthly rent and the TDS rate applied by the tenant. See how the TDS appears in Form 26AS, how to claim credit in your ITR, and three tax liability scenarios showing whether you owe additional tax or get a refund.

Share your result

All inputs are encoded in the URL. Click Share to send your exact TDS scenario to your CA, landlord, or tenant.

The Formula

TDS on rent is straightforward — it is a flat percentage of the rent amount:

Section 194IB (Individual / HUF tenant, not under tax audit):
TDS = Total Rent × 2%
Applicable when: Monthly rent > ₹50,000
Rate effective: 1 October 2024 (Finance Act 2024; previously 5%)

Section 194I (Business tenant / person under tax audit):
TDS = Total Rent × 10%
Applicable when: Annual rent > ₹2,40,000

Without landlord PAN (Section 206AA):
TDS = Total Rent × 20%
Applies when landlord fails to furnish PAN

Penalties:
Late deduction interest = TDS Amount × 1% × Number of months (or part)
Late deposit interest = TDS Amount × 1.5% × Number of months (or part)
Late filing fee (Sec 234E) = ₹200 per day (capped at TDS amount)

The key difference between 194IB and 194I: individual tenants (194IB) do not need a TAN, file Form 26QC once, and deduct TDS in the last month. Business tenants (194I) need a TAN, file quarterly Form 26Q, and deduct TDS every month.

Example

Tenant Rahul pays ₹65,000/month to landlord Mr. Sharma

Rahul (32) is a salaried individual renting an apartment in Bangalore for ₹65,000/month. He is not subject to a tax audit. His landlord, Mr. Sharma, has provided his PAN. Rahul wants to understand his TDS obligation under Section 194IB.

Step 1: Check eligibility

Monthly rent₹65,000

Tenant typeIndividual (not under tax audit)

Threshold₹50,000/month (Sec 194IB)

TDS applicable?Yes (₹65,000 > ₹50,000)

Step 2: Calculate TDS

Annual rent (12 months)₹7,80,000

TDS rate (with PAN)2%

TDS amount₹15,600

Net rent to landlord₹7,64,400

Step 3: Compliance

Form to fileForm 26QC (online on TRACES)

TAN required?No

When to deductLast month of FY (March) or last month of tenancy

Due dateWithin 30 days from end of deduction month

Certificate to landlordForm 16C (download from TRACES after 26QC filing)

What if Mr. Sharma did not provide PAN?

TDS rate without PAN20% (Section 206AA)

TDS amount without PAN₹1,56,000

Difference₹1,40,400 extra TDS!

Without PAN, Rahul would need to deduct ₹1,56,000 instead of ₹15,600 — a 10x increase. This is why collecting the landlord's PAN is essential before signing the rent agreement. Mr. Sharma can claim the TDS credit in his ITR and get a refund if his total tax liability is less than ₹15,600.

FAQ

When is TDS on rent applicable? ▼

TDS on rent is applicable in two scenarios: (1) Section 194IB — if you are an individual or HUF tenant (not subject to tax audit) and your monthly rent exceeds ₹50,000, you must deduct TDS at 2% (effective 1 Oct 2024; previously 5%). (2) Section 194I — if you are a business entity or individual subject to tax audit under Section 44AB, you must deduct TDS at 10% on rent payments when annual rent exceeds ₹2,40,000 (₹20,000/month). The key distinction is the nature of the tenant, not the landlord. If your monthly rent is ₹50,000 or below and you are an individual not under audit, no TDS is required.

What is Form 26QC? ▼

Form 26QC is the challan-cum-statement used by individual/HUF tenants to report and deposit TDS deducted under Section 194IB. It is filed online on the TRACES portal (tdscpc.gov.in). Unlike business TDS (which requires a TAN and quarterly returns), Form 26QC is a simplified one-time filing per financial year or tenancy period. After filing 26QC, the tenant must download Form 16C (TDS certificate) from TRACES and provide it to the landlord within 15 days. The landlord uses Form 16C to verify the TDS credit in their Form 26AS and claim it in their ITR.

Do I need a TAN for Section 194IB? ▼

No. One of the key advantages of Section 194IB is that individual/HUF tenants do not need to obtain a TAN (Tax Deduction Account Number). You can file Form 26QC using only your PAN and the landlord's PAN. This is a deliberate simplification by the government to make TDS compliance easier for individual tenants. However, under Section 194I (business tenants), a TAN is mandatory — you must apply for one on the NSDL website before deducting TDS.

What if the landlord doesn't have PAN? ▼

If the landlord does not furnish their PAN, Section 206AA mandates that TDS must be deducted at 20% instead of the normal 2% (Section 194IB) or 10% (Section 194I). This is a significant penalty — on ₹7,80,000 annual rent, TDS jumps from ₹15,600 (2%) to ₹1,56,000 (20%). The landlord can claim the excess TDS as a refund by filing their ITR, but this creates a cash flow problem for the entire year. Always collect the landlord's PAN before the tenancy begins. Include it as a mandatory field in the rent agreement.

What is the penalty for not deducting TDS on rent? ▼

There are three types of penalties: (1) Interest on late deduction — 1% per month (or part of month) from the date TDS was deductible to the date of actual deduction (Section 201(1A)). (2) Interest on late deposit — 1.5% per month (or part of month) from the date of deduction to the date of actual deposit. (3) Late filing fee — ₹200 per day under Section 234E until the return is filed, capped at the TDS amount. Additionally, the Assessing Officer can disallow the rent expense deduction under Section 40(a)(ia) if TDS was not deducted — meaning you lose the tax benefit of the rent payment. For Section 194IB, the penalty is typically just the interest, but for Section 194I, the consequences can be more severe including prosecution in extreme cases.

Related Calculators

Add This Calculator to Your Website

Embed the sum.money TDS on Rent Calculator on your site. Free, responsive, always up-to-date.