Does the landlord or the tenant deduct it?

The tenant deducts the tax from the rent and pays it to the government. The landlord then claims credit for it in their own return.

Is this the same as the HRA rule?

No. HRA is the tenant's tax exemption on house rent allowance. TDS on rent is a separate duty that arises when the monthly rent is high enough.

What if I paid the tax late?

Late payment can attract interest and a fee. Pay as soon as you notice and keep the receipt. A chartered accountant can tell you what applies to your case.

TDS on rent above ₹50,000 a month: what tenants must do

Money · 3 min read · Updated 26 October 2026

If you pay more than ₹50,000 a month in rent, the Income Tax Act may require you to deduct tax before paying your landlord. Many tenants only learn this when a notice arrives. This guide explains the rule in plain terms. Rates and limits change, so confirm them on the Income Tax portal before you act.

Who has to deduct it

Section 194IB applies to an individual or a Hindu undivided family who pays rent above ₹50,000 for a month or part of a month, and who is not already required to get their accounts audited. Companies and people who are subject to audit follow a different rule.

The test is the rent for the month, not the whole year. If your rent is exactly ₹50,000 or less, this section does not apply. Whether maintenance or other charges count as rent can depend on how the agreement is written, so keep them separate and clearly labelled.

How much and when

The rate has been 2% of the rent in recent years. Under this section the tax is deducted once a year, in the last month of the financial year, or in the last month of the tenancy if the tenancy ends earlier. You deduct the tax on all the rent for the year in one go, and you may need to take it from that month's rent.

If the landlord has not given you a PAN, a higher rate can apply. Ask for the landlord's PAN when you sign, and write it into the agreement.

How to pay it

You do not need a TAN. You pay through the Income Tax e-filing and e-payment pages using the challan-cum-statement, Form 26QC, within 30 days from the end of the month in which you deducted the tax. Afterwards you download Form 16C from the TRACES portal and give it to your landlord, who uses it to claim the credit.

Keep the challan receipt and Form 16C with your rent receipts
Match the landlord's PAN to the name on the agreement
Do the payment on time: late payment attracts interest and a fee

What to put in the agreement

The agreement should say that the tenant will deduct tax where the law requires it, that the landlord will provide a PAN, and that the rent stated is before any deduction. Without this, landlords sometimes expect the full rent and tenants end up out of pocket.

Our drafts let you record the landlord's PAN, which makes the clause easy to apply.

Common mistakes

Tenants often deduct every month when the section only needs one deduction a year. Others forget to pay the challan or to pass on Form 16C. A third mistake is treating a rent increase mid-year as a fresh start: if the rent crosses ₹50,000 during the year, check the rule for the months it applies to.

Common questions

Does the landlord or the tenant deduct it?: The tenant deducts the tax from the rent and pays it to the government. The landlord then claims credit for it in their own return.
Is this the same as the HRA rule?: No. HRA is the tenant's tax exemption on house rent allowance. TDS on rent is a separate duty that arises when the monthly rent is high enough.
What if I paid the tax late?: Late payment can attract interest and a fee. Pay as soon as you notice and keep the receipt. A chartered accountant can tell you what applies to your case.

Start your rent agreement

General information, not legal advice. Laws and procedures vary by state and change over time. Check official sources or a local lawyer before you act.