Income Tax advisory for tenants in India : deduct and pay TDS on rent u/s 194IB

By | December 23, 2017
(Last Updated On: December 23, 2017)

Income Tax Department advisory to deduct and pay TDS on rent u/s 194IB under which individual/HUF are obliged to deduct if rent exceeds Rs. 50000/- per month.

In order to widen the scope of tax deduction at source, the Finance Act, 2017 w.e.f. 1st June, 2017 has inserted a new section 194-IB in the Income Tax Act, 1961 to provide that Individuals or a HUF (other than those covered under 44AB of the Act), responsible for paying to a resident any income by way of rent exceeding fifty thousand rupees for a month or part of month during the previous year, shall deduct an amount equal to five per cent. of such income as income-tax thereon.

In order to reduce the compliance burden, the section provides that:

(a) The deductor shall not be required to obtain tax deduction account number (TAN) as per section 203A of the Act.
(b) The deductor shall be liable to deduct tax only once in a previous year.

Income Tax Department has issued the following advisory to remind the tenants the provisions of the newly inserted section and tax compliance required in this regard.

Are you an individual/HUF paying monthly rent of more than Rs. 50000/- per month to a person who is an Indian resident, then:

  • Deduct and deposit TDS @ 5% under section 194IB of the Income Tax Act, 1961 at the time of credit of rent for the last month of the financial year or in the month in which the premises is vacated/agreement terminated.

  • Upload details of Tax deducted along with correct PAN of the landlord in Form No. 26QC on TIN website ( (The tenant is not required to obtain TAN).

  • Download and issue TDS certificates to landlord in Form No. 16C from TRACES website ( within 15 days of uploading Form No. 26QC.

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About CA Satbir Singh

Chartered Accountant having 12+ years of Experience in Taxation , Finance and GST related matters and can be reached at Email :

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