Do you know that Individuals also need to deduct TDS on Rent paid to landlords and failing to deduct TDS can attract hefty penalties? Don’t worry we will learn about the rule and how to deduct and pay the TDS amount.

I will try to explain this without going into the intricacies and avoiding complicated wordings of the income tax act. After reading this blog you (individual) will get all the knowledge required to navigate this tax hurdle with ease.

What is TDS?

TDS stands for Tax deducted at source. This is done by the government primarily for 2 purposes:

  1. To spread a wider net and collect taxes even from those persons (individuals or organizations) who would have otherwise not paid taxes on those transactions or at all.
  2. To get tax on time

This is the same TDS that is deducted from salaries that they receive from their respective organizations (if they earn above a certain threshold).

TDS on Rent payment is applicable to me?

Generally, TDS on rent payment was applicable to organizations or professionals who get their tax audits done by CA. However, recent amendments have brought the salaried and the other category of businesses and professionals also into this net.

So, even as an individual – yes if you are paying rent above a certain limit then you are liable to deduct TDS on rent payment.

So what is the TDS for Rent limit?

For individuals – if you are paying greater than 50,000/- per month in rent then you need to deduct TDS on rent under section 194IB

Now the next question would be about

TDS Rates: How much do I deduct?

Individuals need to deduct 5% TDS on rent

This amount need not be deducted monthly. This can be deducted in a single transaction at the financial year-end. However, if you are vacating the property before that, then you have to deduct it in the last month of stay/ tenancy.

What all to know and do, to pay the tax deducted

Taking TAN number is not necessary to deduct TDS on rent

Once the amount is deducted, the same has to be submitted to the government through form 26QC @ Tax Information Network website

The last date is 30th April in case the amount is deducted in March, however, for other months it is on or before the 7th day of the next month. Best pay it as soon as possible – along with rent payment to the landlord. It’s never a good idea to keep government money – worse if you forget about it.

Details of the landlord, property, and amount would be required to fill the form so keep those handy.

After filling those details the amount can be paid via online payment methods.

You will need to provide a TDS certificate (Form 16C) to the landlord within 15 days after the last allowed date of filing 26QC. So for 30th April, it would be 15th of May. Form 16C is available on the Traces website and can be downloaded after about 3 days of submitting the tax.

Penalties in case of non compliance

TDS penalty can run in Lakhs

In case you don’t deduct TDS on Rent: You have to pay 1% interest as a penalty for every month’s delay

In case you deducted TDS but did not deposit it: You have to pay 1.5% interest as a penalty for every month’s delay

If you delay filing form 26QC: The late fee is 200 per day. If it is not filed even after 1 year of the due date penalty can be between 10k and 1L.

If you have filed 26QC but not issued 16C: Late fee is 100 per day.

Other salient points to keep in mind

If the landlord does not give their PAN – the tax deduction has to be 20% under Section 206AA – generally should not be the case for individuals most of which would want HRA benefit. If still they don’t give PAN, I doubt they will accept tax deduction from payments which will defeat their purpose of not giving PAN.

If the security deposit is refundable – TDS is not applicable. However, if it is non-refundable it has to be treated as rent and TDS on rent is to be deducted on that amount as well.

TDS is applicable on non-GST amount – What? Do I need to pay GST on rent? Yes, in some cases – story for another day.

Final Words

Now before you think that renting is a hassle and let’s buy a new house instead do read about managing assets and liabilities to achieve the desired financial goal. Also, let me know if you think this was useful.

Categories: Tax

Ravi Maheshwari

Ravi is an IIM ranker with over 9 years of work experience and has helped optimize the financial performance of companies like BPCL, Sun, Ola, Swiggy, and Curefit. In this blog, he explains how to improve personal finance and also gives insights into financial models of companies.


Ian · April 21, 2021 at 13:24

We are a group of volunteers and starting a new scheme in our community.
Your website offered us with valuable information to work on. You’ve done an impressive job and our whole community will be thankful to

daftar situs judi slot online terpercaya · April 22, 2021 at 05:56

It’s going to be finish of mine day, but before end I am
reading this wonderful post to increase my knowledge.

Teresa · April 23, 2021 at 03:20

Hey! Quick question that’s completely off topic. Do you know how to make your site mobile friendly?
My weblog looks weird when viewing from my iphone 4.

I’m trying to find a theme or plugin that might be able to resolve this
problem. If you have any recommendations, please share.
Thank you!

klik posting berikut · April 23, 2021 at 21:46

I am extremely impressed together with yoᥙr writing abilities as neatly as with the structure too
your wеblοg. Is that this a paid subject or did you modify iit your self?
Anyway keep up the nihe quality writing, it is rare to peer a great bⅼog like this one

Sadie · April 27, 2021 at 06:10

Truly no matter if someone doesn’t understand afterward its up to other
people that they will help, so here it takes place.

tembak ikan · April 28, 2021 at 11:28

Еxcellent blog here! Also ʏour web site ⅼoads up very fast!
What host aaгe you using? Cann I get your affiliate link to youг host?
I ᴡish my site loaded uup as quiϲkly as yours lol · April 28, 2021 at 21:44

Ꭲerrific work! This іs the type of information that are supроsed to bbe shɑred around tthe net.

Dіsgrаce on the search engines ffor now not poѕitioning thіs publish upper!
Cоme on over and talk oveг wjth my sјte . Thank you =)

ioncasino · April 29, 2021 at 01:44

Nice ɑnswers in return of this qᥙestion witһ real arguments ɑnd telling aall on the topic of that.

Wendell · May 1, 2021 at 04:47

I every time used to read post in news papers but now as I am
a user of net therefore from now I am using net for articles,
thanks to web.

situs judi online · May 2, 2021 at 22:03

you’re in reaⅼity a excellent webmaster. The website loading pace is incredible.
It seems thaqt you’re doihg any unique trick. In additіon, The contents
are masterpiece. yⲟu’ve done a fantаstic task in this matter!

Hal · May 4, 2021 at 07:11

I am regular visitor, how are you everybody? This piece of writing posted
at this site is actually nice.

온라인바둑이사이트추천 · May 5, 2021 at 00:53

Betting can be of several forms, with each
type requiring its own legal arrangement. In Nevada, for example, there is what is known as
a”lawsuit” A suit is an agreement or a contract involving a person placing a wager and the person or group putting the cash at stake.
In some states, a”gaming accounts” is made in which money deposited into the account is kept by means of
a bookmaker and isn’t accessible to gamers; others allow online gambling but do not permit
offline gambling. In the end, you will find”rollover” trades in which the cash in a player’s account is withdrawn before it’s used.
This manner, the expression gaming covers a vast range of trades and may refer
to every one of these, as each has its own set of conditions under which it may
take place.

editing foto · May 5, 2021 at 08:51

What’s upp ttߋ every single one, it’s actually a pleasant for me to visit thі web page, it contains
useful Information.

situs judi slot online · May 5, 2021 at 15:37

This paragraph offers clear idea in support of the new visitors of blogging,
that really how to do blogging and site-building.

Benny · May 8, 2021 at 15:09

It’s nearly impossible to find knowledgeable people for
this subject, but you seem like you know what you’re talking about!

agen joker123 · May 10, 2021 at 21:58

Thankfulness to my father who shared with me on the topic of this web site, this website is in fact remarkable.

comment-81189 · May 18, 2021 at 16:52

Hi there colleagues, its fantastic post about cultureand
entirely explained, keep it up all the time.

game online terbaru joker123 · May 18, 2021 at 19:26

Wow, fantastic blog format! How lengthy have you been running a blog for?

you make running a blog glance easy. The total glance of your web site is
fantastic, as neatly as the content material!

comment-41208 · May 19, 2021 at 02:30

If some one needs expert view on the topic of running a blog after that
i recommend him/her to go to see this blog, Keep up the pleasant job.

prediksi judi bola online · May 20, 2021 at 10:18

If some one needs expert view regarding blogging and site-building then i propose him/her to
visit this blog, Keep up the nice job.

KiaUnita · July 3, 2021 at 09:08

[url=]20mg tadalafil[/url]

slot online · July 3, 2021 at 10:31

I’m not that much of a internet reader
to be honest but your sites really nice, keep it up! I’ll go ahead and bookmark your website to come back later.
All the best

Leave a Reply

Your email address will not be published. Required fields are marked *