{"id":7725,"date":"2025-07-14T10:12:02","date_gmt":"2025-07-14T10:12:02","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/?post_type=glossary&#038;p=7725"},"modified":"2025-07-14T10:15:27","modified_gmt":"2025-07-14T10:15:27","slug":"section-194ib-tds-on-rent-of-property","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/section-194ib-tds-on-rent-of-property\/","title":{"rendered":"Section 194IB \u2013 TDS on Rent of Property"},"content":{"rendered":"<h2 id=\"what-is-section-194ib\" class=\"wp-block-heading\">What is Section 194IB?<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A rule in India&#x2019;s <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/income-tax-act\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Income Tax Act<\/a> that applies when an <strong>individual or HUF<\/strong> pays rent exceeding <strong>&#x20B9;50,000 per month<\/strong> to a <strong>resident landlord<\/strong>&#x202F;<\/li>\n\n\n\n<li>Introduced in June 2017 to bring big rent payments under the <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/tax\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>tax<\/a> system.<\/li>\n<\/ul>\n\n\n\n<h2 id=\"who-must-deduct-tds\" class=\"wp-block-heading\">Who must deduct <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/tds\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>TDS<\/a>?<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Tenant must be an <strong>individual or HUF<\/strong>.<\/li>\n\n\n\n<li>Tenant <strong>should not<\/strong> need a tax audit (under Section 44AB)<\/li>\n\n\n\n<li>Rent should be <strong>&#x20B9;50,000 or more per month<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 id=\"what-counts-as-rent\" class=\"wp-block-heading\">What counts as &#x201C;rent&#x201D;?<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Any payment under lease, tenancy, or use of land, building, or both&#x202F;.<\/li>\n<\/ul>\n\n\n\n<h2 id=\"how-much-tds-must-be-deducted\" class=\"wp-block-heading\">How much TDS must be deducted?<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>5%<\/strong> of rent if landlord provides PAN;<\/li>\n\n\n\n<li>If PAN not given, then <strong>20%<\/strong>.<\/li>\n\n\n\n<li><strong>Important update:<\/strong> From <strong>October 1, 2024<\/strong>, the rate changed to <strong>2%<\/strong> (20% if PAN missing)&#x202F;.<\/li>\n<\/ul>\n\n\n\n<h2 id=\"when-to-deduct\" class=\"wp-block-heading\">When to deduct?<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>In the <strong>last month of tenancy<\/strong> (if moving out during year),<br>OR<\/li>\n\n\n\n<li>In <strong>March<\/strong>, if tenant stays throughout the year&#x2014;i.e., the last month of the financial year&#x2014;at the <strong>earlier of rent credit or payment<\/strong>&#x202F;.<\/li>\n<\/ul>\n\n\n\n<h3 id=\"how-and-by-when-to-file\" class=\"wp-block-heading\">How and by when to file?<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Pay TDS and file <strong><a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/form-26q\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Form 26Q<\/a>C<\/strong> (challan-cum-statement) <strong>within 30 days<\/strong> after month-end.<\/li>\n\n\n\n<li>Issue <strong><a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/form-16\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>Form 16<\/a>C<\/strong> (TDS certificate) to landlord <strong>within 15 days<\/strong> after filing 26QC.<\/li>\n\n\n\n<li>Tenant <strong>does not need a TAN<\/strong>, only PAN of both parties is needed&#x202F;.<\/li>\n<\/ul>\n\n\n\n<h3 id=\"example\" class=\"wp-block-heading\">Example:<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Suppose rent is &#x20B9;60,000\/month from April&#x2013;March.<\/li>\n\n\n\n<li>Tenant deducts 5% (&#x20B9;3,000\/month) &#x2192; &#x20B9;36,000 total in <strong>March<\/strong> (or 2% if after Oct 2024: &#x20B9;14,400).<\/li>\n\n\n\n<li>If moving out in November, deduct in <strong>November<\/strong>&#x202F;.<\/li>\n<\/ul>\n\n\n\n<h3 id=\"what-if-tds-isn-t-done\" class=\"wp-block-heading\">What if TDS isn&#x2019;t done?<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Late deduction<\/strong>: 1% per month interest.<\/li>\n\n\n\n<li><strong>Late deposit<\/strong>: 1.5% per month.<\/li>\n\n\n\n<li><strong>Late filing<\/strong>: &#x20B9;200 per day (capped) penalty.<\/li>\n\n\n\n<li>Potential penalty under <strong>Section 271C<\/strong>.<\/li>\n<\/ul>\n\n\n\n<h3 id=\"key-points\" class=\"wp-block-heading\">Key Points<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Only applies to <strong>individuals\/HUFs<\/strong>, not audited entities.<\/li>\n\n\n\n<li>Applies if rent <strong>&gt; &#8377;50,000\/month<\/strong>.<\/li>\n\n\n\n<li>TDS at <strong>5%<\/strong>, now <strong>2% from Oct 2024<\/strong>, or <strong>20% without PAN<\/strong>.<\/li>\n\n\n\n<li>Deduction timing: <strong>last month rent<\/strong>, either of tenancy or year.<\/li>\n\n\n\n<li>Compliance: <strong>Form 26QC<\/strong> &#x2192; <strong>Form 16C<\/strong>, no TAN needed.<\/li>\n\n\n\n<li>Late compliance leads to interest and penalties.<\/li>\n<\/ul>\n\n\n\n<p>Section 194IB was made simple for tenants with high rent. A one-time annual TDS cut avoids monthly hassle.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is Section 194IB? Who must deduct TDS? What counts as &#x201C;rent&#x201D;? How much TDS must be deducted? When to deduct? How and by when to file? Example: What if TDS isn&#x2019;t done? Key Points Section 194IB was made simple for tenants with high rent. A one-time annual TDS cut avoids monthly hassle.<\/p>\n","protected":false},"author":9,"featured_media":0,"menu_order":0,"template":"","meta":{"footnotes":""},"class_list":["post-7725","glossary","type-glossary","status-publish","hentry"],"blocksy_meta":[],"_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/7725","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/users\/9"}],"version-history":[{"count":2,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/7725\/revisions"}],"predecessor-version":[{"id":7729,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/7725\/revisions\/7729"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=7725"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}