TDS on rent: the ₹50,000 tripwire most tenants miss
Individual/HUF tenants (not under audit) paying above ₹50,000/month deduct 2% TDS (5% before Oct 2024) — once a year, Form 26QC, no TAN.
TDS for the year (2%)
₹14,400
Deduct from the last month's rent (March, or last tenancy month): pay landlord ₹58,800 that month.
Then: Form 26QC within 30 days of month-end → Form 16C to landlord within 15 days of the 26QC due date. Late 26QC: ₹200/day (capped at TDS).
Steps on incometax.gov.in
- Deduct 2% from last month's rent; pay landlord the net.
- File challan-cum-statement Form 26QC online (your PAN + landlord PAN, no TAN).
- Download and issue Form 16C to the landlord within 15 days of the 26QC due date.
- Keep 26QC acknowledgement + 16C copy for your ITR file.
The rules in 60 seconds
Who: individual/HUF tenants NOT under tax audit, paying a resident landlord above ₹50,000/month (any single month triggers it). Rate: 2% since 1 Oct 2024 (5% before). Timing: once a year, in the last month. Paperwork: 26QC in 30 days, 16C in 15 days. No landlord PAN: 20%.
- Companies/audited tenants use 194-I instead (monthly, TAN, Form 26Q) — different track.
- Vacated mid-year? Deduct in the last tenancy month, same 30-day clock.
- Missed deadline interest: 1.5%/month on unpaid TDS.
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Ask SahayakWorked example: rent ₹55,000 a month for a full year
- Rent is above ₹50,000 a month, so a salaried tenant must deduct TDS at 2%.
- Annual rent = ₹6,60,000; TDS = ₹13,200, deducted once from the March rent (or the last month of the tenancy).
- Deposit it with Form 26QC within 30 days of the end of that month, and give the landlord Form 16C. No TAN is needed.
How the TDS on rent calculator works: the rules
- Individuals and HUFs not liable to tax audit must deduct 2% TDS when rent exceeds ₹50,000 a month (rate cut from 5% to 2% from 1 October 2024; continued under the Income-tax Act, 2025).
- If the landlord has no PAN, TDS is 20% (capped at the last month's rent).
- Late deduction attracts 1% interest a month and late deposit 1.5% a month, plus a late-fee for Form 26QC.
Who has to deduct TDS on rent
If you're an individual or HUF not covered by a tax audit, you deduct TDS only when the rent is more than ₹50,000 a month. You don't need a TAN. Deduct 2% once a year — in the last month of the financial year or the last month of the tenancy, whichever comes first — and pay it with Form 26QC within 30 days of the end of that month.
Businesses and individuals under tax audit follow a different rule: they deduct TDS every time rent is paid, at 10% for land, building or furniture and 2% for plant and machinery, and file regular TDS returns with a TAN.
After you deposit the TDS
Download Form 16C from the TRACES portal within 15 days of the due date of Form 26QC and give it to your landlord. The landlord claims the TDS as a credit in their own return. If you miss the due date, you pay interest and a late fee of ₹200 a day (capped at the TDS amount).
Landlord without PAN or living abroad
If the landlord doesn't give a PAN, the TDS rate goes up to 20% (capped at the last month's rent). If the landlord is a non-resident (NRI), different rules apply — TDS is deducted at a much higher rate under the NRI section of the law, you need a TAN, and you file quarterly TDS returns. Ask a tax adviser before paying rent to an NRI.
How to fill Form 26QC step by step
Log in to the income-tax e-filing portal, go to e-File → e-Pay Tax, choose Form 26QC (TDS on rent of property), and fill in your PAN, the landlord's PAN, the property address, the tenancy period and the rent. Pay the TDS through net banking or another listed method. Save the challan and acknowledgement — you'll need the acknowledgement number to download Form 16C from TRACES.
Paying rent in advance or for part of a year
If you pay rent for several months in advance, TDS applies when the monthly rent is above ₹50,000, even if you pay it in one go. If you move out mid-year, deduct TDS in the month you leave, on the total rent for the months you stayed. If rent crosses ₹50,000 only after an increase during the year, TDS applies from the month it crosses the limit.
Interest and penalties if you miss it
Not deducting TDS can mean interest at 1% a month on the amount not deducted, and 1.5% a month if deducted but not deposited. A late fee of ₹200 a day applies until Form 26QC is filed, capped at the TDS amount. The tax department can also disallow part of the expense for businesses. Setting a reminder for March, or your move-out month, avoids all of this.
TDS on rent at a glance
| Who pays rent | TDS rate | When | Form |
|---|---|---|---|
| Individual / HUF not under audit | 2% (rent above ₹50,000 a month) | Once — last month of year or tenancy | Form 26QC, no TAN |
| Business / individual under audit — building | 10% | Every payment (above ₹50,000 a month or as notified) | Quarterly TDS return, TAN |
| Business — plant and machinery | 2% | Every payment | Quarterly TDS return, TAN |
| Landlord without PAN | 20% (capped at one month's rent) | As above | As above |
| NRI landlord | Higher NRI rate | Every payment | Quarterly return, TAN |
Rate for individuals cut from 5% to 2% from 1 October 2024. Section numbers changed under the Income-tax Act 2025; the rules carried over.
TDS on rent calculator: frequently asked questions
Do I need to deduct TDS on rent?
Yes, if you are an individual or HUF paying rent above ₹50,000 a month, even if you are not in business.
What is the TDS rate on rent?
2% of the rent, but only when rent is more than ₹50,000 a month. The rate was cut from 5% to 2% from 1 October 2024.
How do I pay TDS on rent?
Online through Form 26QC on the Income Tax portal, using your PAN and the landlord's PAN — no TAN required.
When should I deduct it?
Once a year, from the rent for March or the last month of the tenancy, whichever is earlier.
What if my landlord has no PAN?
TDS is 20%, limited to the last month's rent.
What happens if I forget?
You pay interest of 1% a month for not deducting and 1.5% a month for late deposit, plus late fees for Form 26QC.
Official sources: Income Tax Department — TDS on rent by individuals/HUF· Last reviewed 2026-10-30. Results are estimates — confirm final figures with your lender, insurer or tax adviser.