Wealthsane | https://www.wealthsane.com Income tax filing & Financial Planning Services Mon, 21 Apr 2025 10:59:48 +0000 en-US hourly 1 https://wordpress.org/?v=6.8 https://www.wealthsane.com/wp-content/uploads/2024/01/cropped-Wealthsane-favicon-32x32.jpg Wealthsane | https://www.wealthsane.com 32 32 Paying Rent Above ₹50,000? Know Your TDS Deduction & Form 26QC Rules https://www.wealthsane.com/tds-on-rent/ https://www.wealthsane.com/tds-on-rent/#respond Mon, 21 Apr 2025 10:40:34 +0000 https://www.wealthsane.com/?p=3051

Are you an individual paying monthly rent above ₹50,000? Whether you’re a salaried employee, freelancer, or running a small business—you are required to deduct 2% TDS on your rent under Section 194-IB of the Income Tax Act.

🧾 What is Section 194-IB? ­

Introduced in 2017, Section 194-IB mandates that:

  • If any individual or HUF (not liable to audit under Section 44AB)
  • Pays monthly rent exceeding ₹50,000
  • To a resident landlord

Then, the tenant must:

✅ Deduct 2% TDS on the total rent amount
✅ Deposit the TDS using Form 26QC
✅ Issue Form 16C (TDS certificate) to the landlord

📅 When to Deduct TDS?

There are two ways to comply:

Monthly Deduction & Filing

  • Deduct 2% TDS every month
  • File Form 26QC every month

Annual Deduction & Filing (Simplified Option)

  • Deduct the entire 2% TDS  on  total rent in March
  • File Form 26QC once by 30th April

This second option is ideal for salaried individuals and others who prefer simpler annual compliance.

❗ What If You Don’t Deduct TDS?

If you fail to deduct or deposit TDS:

  • You may receive an income tax notice
  • Be liable to pay interest, late fees, and penalties
  • Your landlord may face issues in their ITR             

It’s a small step that can help avoid big trouble.

📌 Common Myths

❌ “I’m not claiming HRA, so this doesn’t apply to me.”
✔ Wrong! This rule applies regardless of HRA. Even if you don’t claim HRA in your ITR, you still need to deduct TDS if your rent is over ₹50,000.

❌ “Only landlords need to worry about TDS.”
✔ Wrong again. Tenants are responsible for deducting and filing TDS under Section 194-IB.

✅ Quick Checklist for Tenants

  • Paying rent above ₹50,000/month? ✅
  • Deduct 5% TDS once in March ✅
  • File Form 26QC by 30th April ✅
  • Download & issue Form 16C to landlord ✅
  • Ensure it reflects in your ITR filing ✅

We are AMFI Registered Mutual Funds Distributors & Top Tax Consultants based out of Thane

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