TDS on rent applies when the rent is more than ₹50,000 for a month or part of a month. If you are a salaried or other individual or HUF, you deduct 2% and pay it with Form 141, without a TAN. Companies, firms and larger businesses deduct 10% on land, buildings and furniture, or 2% on plant and machinery, and need a TAN.
These rules apply from 1 April 2026 under section 393 of the Income-tax Act, 2025. The limit and rates were the same for FY 2025-26 under sections 194-IB and 194-I. This guide explains which rule applies to you, when to deduct, how to pay, and what the landlord should do.
- Limit: rent above ₹50,000 for a month or part of a month. Below that, no TDS.
- Individual or HUF tenant (no large business): 2%, deducted once a year from the March rent (or the last month if you move out), paid with Form 141 within 30 days. No TAN needed.
- Company, firm, or individual with business turnover above ₹1 crore (or professional receipts above ₹50 lakh): 10% on land, building, furniture and fittings; 2% on plant, machinery and equipment. Deduct on each payment, pay by the 7th, file Form 140 every quarter.
- No PAN from the landlord: 20%. For individual tenants, the TDS cannot be more than the last month's rent.
- No surcharge or cess is added to these rates.
TDS on rent limit and rate
| Individual or HUF tenant (no large business) | Business, company, firm or other payer | |
|---|---|---|
| Rule from tax year 2026-27 | Section 393(1), Table Sl. No. 2(i) | Section 393(1), Table Sl. No. 2(ii) |
| Rule for FY 2025-26 | Section 194-IB | Section 194-I |
| Limit | Rent above ₹50,000 for a month or part of a month | Rent above ₹50,000 for a month or part of a month |
| Rate | 2% | 10% on land, building, furniture, fittings; 2% on plant, machinery, equipment |
| When to deduct | Once, from the rent for the last month of the year (or of the tenancy) | On each credit or payment, whichever is earlier |
| TAN | Not needed (use your PAN) | Needed |
| How to pay and report | Form 141 (was 26QC), within 30 days from the end of the month of deduction | Challan by the 7th of the next month (March: 30 April), then quarterly Form 140 (was 26Q) |
| Certificate to landlord | Form 132 (was 16C), within 15 days from the Form 141 due date | Form 131 (was 16A), within 15 days from the quarterly return due date |
| Rent covered | Land and building | Land, building, plant, machinery, equipment, furniture, fittings |
The ₹50,000 test is per month. A rent of ₹45,000 a month is ₹5.4 lakh a year, but no TDS applies, because no single month is above ₹50,000. Some websites give the limit as ₹6 lakh a year. The law sets no yearly figure: the test is each month's rent.
Who deducts under which rule
The rule depends on the tenant, not the landlord.
- Business rule (old 194-I): every payer that is not an individual or HUF, such as a company, firm, LLP or trust. Also an individual or HUF whose business turnover is above ₹1 crore, or whose professional receipts are above ₹50 lakh.
- Individual rule (old 194-IB): every other individual or HUF. This covers a salaried person renting a flat, and a small shop owner below the turnover limit.
The landlord must be a resident under both rules. If your landlord is a non-resident (an NRI), TDS on rent falls under different rules with different rates, and you need a TAN. Ask a CA before you pay.
FY 2025-26 and earlier years
| Period | Individual or HUF tenant (194-IB) | Business tenant (194-I) |
|---|---|---|
| FY 2025-26 | 2%, rent above ₹50,000 a month, Form 26QC, Form 16C | 2% or 10%, rent above ₹50,000 for a month or part of a month, Form 26Q, Form 16A |
| FY 2024-25 | 5% up to 30 September 2024; 2% from 1 October 2024; limit ₹50,000 a month | 2% or 10%, rent above ₹2,40,000 in the year |
| Before FY 2024-25 | 5%, limit ₹50,000 a month | 2% or 10%, rent above ₹2,40,000 in the year |
The 2% rate for individuals came in from 1 October 2024 (Finance (No. 2) Act, 2024). The monthly limit for businesses came in from 1 April 2025 (Finance Act, 2025).
How an individual tenant deducts and pays (Form 141)
- Check the rent. If the rent for any month is above ₹50,000, TDS applies.
- Deduct 2% once, when you pay or credit the rent for March (the last month of the tax year), or for the last month you stay if you leave earlier.
- Pay with Form 141 (the challan-cum-statement) within 30 days from the end of that month. You use your PAN; you do not need a TAN.
- Download Form 132 from TRACES and give it to the landlord within 15 days from the Form 141 due date.
Want us to do it? We file Form 141 for tenants and download Form 132 for the landlord. See our TDS return filing service.
How a business deducts and pays
- Deduct 10% (building, land, furniture) or 2% (plant, machinery, equipment) each time you pay or credit rent above the limit.
- Pay the TDS with a challan by the 7th of the next month. TDS on March rent is due by 30 April.
- Report it in the quarterly return, Form 140 (was 26Q). See the TDS return filing guide for due dates.
- Give the landlord Form 131 (was 16A) from TRACES within 15 days from the return's due date.
Example. A company pays ₹80,000 a month for an office. TDS is 10%, so ₹8,000 a month. It pays the landlord ₹72,000 and deposits ₹8,000 by the 7th of the next month.
If one agreement covers a building and its furniture or machinery, and the rents are separate, apply 10% and 2% to each part. If there is one rent for everything, the department's FAQ says the rate follows the main element of the agreement.
Two or more owners. If each owner's share of the rent is fixed and known, test each share against ₹50,000 separately.
If the landlord does not give a PAN
You must deduct at 20% instead of 2% or 10%. For an individual tenant under the 2% rule, the TDS cannot be more than the rent for the last month of the year (or of the tenancy). Ask for the PAN before the deduction month; the landlord also needs it to claim the credit.
What the landlord should know
- Give your PAN to the tenant, so TDS is at 2% or 10%, not 20%.
- Check that the TDS shows in your Form 26AS or AIS, and that you received Form 132 or Form 131.
- Show the full rent as income in your return and claim the TDS as tax paid. If the TDS is more than your tax, you get the excess back as a refund. See our ITR filing service.
- If your tax will be lower than the TDS, you can apply for a nil or lower deduction certificate under section 395.
Late payment and late Form 141
| What went wrong | Cost |
|---|---|
| TDS not deducted | Interest at 1% a month or part of a month until it is deducted |
| TDS deducted but paid late | Interest at 1.5% a month or part of a month until it is paid |
| Form 141 filed late | Late fee of ₹200 a day, up to the TDS amount |
These are the general rules in sections 398(3) and 427 of the 2025 Act (201(1A) and 234E for FY 2025-26). More on them in the TDS return filing guide. A wrong Form 141 can be corrected; see the TDS correction guide.
Not sure which rule applies to you? Book a free consultation with us, and we can file Form 141 or your quarterly return for you.
Frequently asked questions
What is the TDS limit for rent?
TDS applies when the rent is more than ₹50,000 for a month or part of a month. This limit is the same for individual tenants and for businesses.
What is the TDS limit for rent in FY 2026-27?
Rent above ₹50,000 for a month or part of a month, under section 393 of the Income-tax Act, 2025. Individual tenants deduct 2%. Businesses deduct 10% on buildings or 2% on machinery.
What is the TDS limit for rent in FY 2025-26?
The same: rent above ₹50,000 for a month or part of a month, under section 194-IB (2%) for individual tenants and section 194-I (10% or 2%) for businesses.
What is the new limit for TDS on rent?
For businesses under section 194-I, the old limit was ₹2,40,000 a year. From 1 April 2025 it is ₹50,000 for a month or part of a month. For individual tenants the limit was already ₹50,000 a month.
How to pay 2% TDS on rent?
An individual tenant deducts 2% once, from the rent for March or the last month of the tenancy, and pays it online with Form 141 (old Form 26QC) within 30 days from the end of that month. No TAN is needed.
What happens if my rent is more than ₹50,000?
You must deduct TDS. As an individual tenant, deduct 2% from the rent for the last month of the year or tenancy, pay it with Form 141 and give the landlord Form 132.
Is TDS deducted on rent exceeding ₹50,000?
Yes. The limit is "more than ₹50,000". Rent of exactly ₹50,000 a month does not attract TDS.
Is the ₹50,000 limit monthly or annual?
Monthly. The test is the rent for a month or part of a month, not the yearly total. The law has no ₹6 lakh yearly limit.
Is TDS on rent deducted every month?
For an individual tenant, no: once a year, from the last month's rent. For a business tenant, yes: on each payment or credit of rent.
Do I need a TAN to deduct TDS on rent?
Not as an individual tenant under the 2% rule; you use your PAN in Form 141. A business tenant deducting under the 10% or 2% rule needs a TAN.
What if my landlord does not have a PAN?
Deduct 20%. As an individual tenant, the TDS is capped at the rent for the last month of the year or tenancy.
What is Form 26QC and Form 141?
Form 26QC was the challan-cum-statement for TDS on rent by individuals up to 31 March 2026. From 1 April 2026, Form 141 replaces it (and Forms 26QB, 26QD and 26QE).
What if there are two landlords?
If each owner's share of the rent is fixed and known, check each share against ₹50,000 separately.
Hinglish mein sawaal
Rent par TDS kab katna hai?
Agar mahine ka rent ₹50,000 se zyada hai. Individual tenant saal mein ek baar, March ya last month ke rent se, 2% TDS kaatta hai.
50,000 se zyada rent par kitna TDS lagta hai?
Individual ya HUF tenant ke liye 2%. Company ya badi business ke liye building par 10% aur machinery par 2%.
