TDS on Residential Property Rent

TDS on Residential Property Rent

🏠 TDS on Residential Property Rent – Complete Guide for Tenants & Landlords (2025)
Did you know that if you’re paying monthly rent above ₹50,000, you’re legally required to deduct TDS @ 5% under Section 194-IB of the Income Tax Act — even if you’re a salaried individual and not running a business?
Most people associate TDS (Tax Deducted at Source) with businesses, but since 2017, even individual tenants must deduct and deposit TDS when rent crosses the threshold.
In this blog, we simplify how TDS on residential rent works, who it applies to, how to file Form 26QC, generate Form 16C, avoid penalties, and how our team can help you comply accurately and on time.

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📌 What is Section 194-IB?
Section 194-IB mandates that any individual or HUF (not liable for tax audit) who pays monthly rent exceeding ₹50,000 must:
•    Deduct TDS @ 5% from rent
•    File a one-time Form 26QC
•    Issue Form 16C TDS certificate to the landlord
✅ This provision ensures tax transparency even in high-value rental deals between individuals.

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👥 Who Needs to Deduct TDS?
Party    TDS Obligation
Tenant (Individual/HUF)    Yes, if monthly rent > ₹50,000
Tenant (Company/Firm)    Covered under Section 194-I @ 10% TDS
Landlord    Should furnish PAN to avoid higher TDS (20%)
📌 This applies to residential property, including flats, villas, bungalows, and apartments.

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💰 TDS on Rent – How Much and When?
•    Rate: 5% of total rent (no surcharge/cess applicable)
•    Threshold: Applicable only if the monthly rent is> ₹50,000
•    When to deduct: Once at the time of the last rent payment or lease termination, whichever is earlier
✅ TDS is not required every month; it’s a one-time deduction per financial year.

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🧾 Example Calculation
Suppose you're paying ₹60,000/month rent from April 2024 to March 2025.
•    Total annual rent = ₹7,20,000
•    TDS @ 5% = ₹36,000
•    You’ll deduct ₹36,000 at the time of March rent payment (or earlier if vacating)

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📂 Steps to File TDS on Rent (Form 26QC)
1.    Visit https://www.tin-nsdl.com
2.    Click on Form 26QC (TDS on rent)
3.    Fill in:
o    Tenant and landlord PAN
o    Address of rented property
o    Rent details and duration
o    Payment date and mode
4.    Submit and generate acknowledgment
5.    Pay tax online or via a bank challan
6.    Download Form 16C from TRACES and share with the landlord
📌 PAN of the landlord is mandatory. If not provided, TDS must be deducted at 20%.

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📅 Due Dates & Timelines
File Form 26QC: Within 30 days from rent payment/termination
Issue Form 16C: Within 15 days of filing Form 26QC
✅ Filing after deadlines attracts penalties under Section 234E and 271H.

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⚠️ Penalties for Non-Compliance
Default    Penalty/Interest
Late filing of Form 26QC    ₹200/day (up to TDS amount) under Sec 234E
Non-deduction of TDS    Interest @ 1% per month
Deducted but not deposited    Interest @ 1.5% per month
Incorrect PAN or non-filing    ₹10,000–₹1,00,000 under Sec 271H
✅ We help tenants avoid these by handling the entire process end-to-end.

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🧾 Documents Required
•    PAN of the tenant and the landlord
•    Rent agreement
•    Address of property
•    Total rent paid
•    Mode of payment
•    Tenant’s contact and bank details

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💼 Why Choose Us for TDS on Rent Filing?
We assist salaried professionals, families, NRIs, startups, and expats in:
•    ✅ TDS calculation and payment assistance
•    ✅ Form 26QC filing and online payment
•    ✅ Form 16C generation and issuance
•    ✅ Corrections or revisions if needed
•    ✅ Compliance reminders for annual renewals
📞 Paying over ₹50,000 rent per month?
Let our team file your TDS on rent quickly, accurately, and without stress.

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🏁 Final Thoughts
With real estate data becoming increasingly digitized and rent transactions being reported to tax authorities, TDS on high-value residential rent is no longer optional — it's the law.
✅ Stay compliant, avoid penalties, and maintain a clean tax record.
File your TDS on rent (Form 26QC) with expert help today!