WHY TDS MATTERS FOR RENT OVER 50,000/-

Provision Summary:
Under Section 194-IB of the Income Tax Act, individuals or Hindu Undivided Families (HUFs) not liable to tax audit must deduct TDS when rent paid exceeds ₹50,000 per month.

Example:
If you pay ₹60,000/month rent, total annual rent = ₹7,20,000
TDS = 5% of ₹7,20,000 = ₹36,000
You deduct and deposit ₹36,000 to the government, and pay the rest to the landlord

Consequences of Non-Compliance:
Interest for late deduction/deposit
Penalties
Disallowance of expenses under income tax assessment

Criteria Details
Applicable Section Section 194-IB
Who needs to deduct TDS Individual or HUF (not under tax audit)
Threshold Limit Rent > ₹50,000 per month
TDS Rate 5%
PAN of Landlord Required – if not available, TDS at 20%
When to Deduct TDS Once during the financial year (typically in the last month of tenancy or March)
TAN Requirement Not required
Form to be filed Form 26QC (challan-cum-statement)
TDS Certificate Form 16C (to be issued to landlord)
Due Date to Deposit TDS Within 30 days from the end of the month in which TDS is deducted

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