TDS on Rent to be Deducted If Monthly Rent Payment Exceeds Rs. 50,000 (From FY 25-26 Onwards)

Any individual or HUF or others (company/partnership firm) paying a monthly rent above Rs. 50,000 is required to deduct TDS on the rent paid to the landlord. The deducted TDS must be remitted to the Income Tax Department.

If the monthly rent paid is less than Rs. 50,000, then no TDS is required, regardless of who the tenant is. However, if the rent exceeds Rs. 50,000 per month, then TDS is applicable.

TDS on rent for individual or HUF

In case the rent is paid by an individual or HUF whose turnover/gross receipts exceed 1 crore or 50 lakhs, respectively, in the last financial year have to deduct TDS on rent in the current year. The TDS is deducted as follows:

• 2% of rent on plant and machinery
• 10% of rent on land, building or furniture

It is mandatory to have a TAN.

But if the individual or HUF does not exceed these turnover limits, then they need to deduct TDS under Section 194-IB instead. Under this section, the TDS rate is 2%, and no TAN is required.

TDS on rent for Others

On the other hand, if the rent is paid by a company, partnership firm, or any entity apart from individuals and HUFs, then TDS must be deducted under Section 194-I as follows:

• The TDS rate will be 10% for land or buildings.
• 2% for plant or machinery, and the payer is required to have a TAN.