TDS on high rent payments and filing Form 26QC

TDS & TCS TDS Return Forms
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Many people living in rented apartments pay significant amounts in rent every month. But what they don’t know is that if the monthly rent exceeds a certain threshold, you’re required to deduct TDS before paying your landlord.

Who needs to deduct TDS on rent?

An individual or HUF paying a monthly rent of more than ₹50,000 is liable to deduct 2% TDS on the rent amount u/s 194-IB of the Income Tax Act.

If there are multiple landlords (e.g. co-owners), and your payment to any one of them does not exceed ₹50,000 per month, TDS is not required.
Similarly, if you live in a shared apartment and each tenant’s share of rent is below ₹50,000, then TDS is not applicable.

When to deduct TDS?

TDS csn be deducted once a year at the time of making the last rent payment for the financial year or when your tenancy ends — whichever is earlier.

For example, let’s say you pay ₹70,000 per month as rent for FY 2024-35. Here’s how the TDS will be calculated.

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You’ll deduct ₹16,800 as TDS and pay the remaining rent of ₹53,200 to your landlord. The TDS amount then needs to be deposited with the government.

How to deposit the TDS?

Once you deduct the TDS, you need to file Form 26QC and deposit the TDS.

This form needs to be submitted within 30 days from the end of the month in which TDS was deducted.

If you are deducting TDS in March 2025, the due date to file Form 26QC will be 30th April 2025.

After payment, your landlord will see the TDS in their Form 26AS as a tax credit.

How to File Form 26QC from e-Filing Portal?

  1. Visit the Home | Income Tax Department
  2. Login using PAN /User Id and Password
  3. Navigate to e-File > e-Pay Tax
  4. Click on New Payment tab from the right side
  5. Scroll down and select the tab “TDS on Sale of Property (Form 26QC)”
  6. Enter all the required details and make the payment.

What happens if you don’t file the TDS return?

Non-compliance comes with penalties:

  • 1% interest per month for failing to deduct TDS.
  • 1.5% interest per month for failing to deposit TDS.
  • ₹200/day for late filing of Form 26QC (capped at the TDS amount).

A few things to remember:

  • If your landlord’s PAN isn’t linked with Aadhaar or is inoperative, TDS will be deducted at 20%.
  • TDS is applicable even if your landlord is a relative/NRI.
  • In case of rent paid to NRI, Form 27Q needs to be filed and the TDS rate will be 31.2% (including cess). TAN is also mandatory here.

Recently, salaried people who have claimed high HRA exemptions and not paid TDS on rent have been sent out intimations from the ITD. If you have received such an email, we’ve covered the possible solutions in this thread.

If you don’t prefer reading, here’s a video covering the nuances of this topic.

2 Likes
2

Hi Madam,

It seems like the TIN-NSDL website can no longer be used for filing form 26QC. It asks to use the incometaxindia.gov.in site. Can you please check and help?

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Hi @Chirag_Hota

You may follow these steps to File Form 26QC from Income Tax Portal

  1. Visit the Home | Income Tax Department
  2. Navigate to e-File > e-Pay Tax
  3. Click on New Payment tab from right side
  4. Scroll down and select the tab “TDS on Rent of Property (Form 26QC)”
  5. Form 26QC is organized in the following manner
    a. Add Tenant Details
    b. Add Landlord Details
    c. Add Property Rented Details
    d. Add Payment Details
  6. Enter all the required details and make the payment.
  7. Once the payment is made, a challan identification number (CIN) will be generated, which should be saved for future reference.

Hope it helps.

4

Hello madam

as you say in point no 4 Scroll down and select the tab " TDS on Rent Property (form 26QC)" but there is no option of TDS on Rent Property in that SCroll List.

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Hi @Ankit_Jain

Here’s attaching a screenshot for your reference,

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You can check, there is an option 26 QC (TDS on Rent of Property), then, click Proceed to move further.

Hope it helps.

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These are the steps

  1. Go to Home | Income Tax Department
  2. Click login
  3. Login with your details.
  4. Then from the top menu “e-file” → “epay-tax”
  5. Then click “new payment” option
  6. finally you get the old screen.
1 Like
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Hi @Muskan_Balar ,

If rent is paid on monthly basis, do I need to file TDS on rent once a year (towards end of financial year) or do I need to file TDS on rent on monthly basis ?

Thanks

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Hi @ujjwalc

If you’re a tenant of the property, who is making rent payments to the resident landlord need to deduct TDS once in a financial year, which is the last month of the financial year.

You’re required to file Form 26QC within 30 days from

  • The end of the financial year, which is 30th April, or
  • The day on which the property is vacated/ rent agreement terminated.

Here’s more you can read about Form 26QC: TDS on Rent of Property - Learn by Quicko.

10

Dear Ma’am,

Can you please tell us how to download Form 16 once we paid the TDS amount under section 194IB

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Hi @Kuruba_Dinesh

Form 16 is a TDS certificate on salary. It is issued by employers to their employees at the end of FY.

As you mentioned you have paid the TDS amount u/s 194IB, which is for TDS deduction on rent paid by individuals. So in that regard, you are required to download Form 16A.

Form 16A is different from Form 16. Form 16A is for TDS on income other than salary.

Here are the Steps to Download Form 16A from TRACES Portal - Learn by Quicko.

Hope this helps.

12

I Have filed form 26QC on 18th Nov 2024 for 8 months rent paid in november as the agreement is over , Total rent for 8 months 515955/- which is appx 64494/- per month & deposited tax of Rs. 25798/- (5%), However in Landlord 26AS only Rs. 10319/- is reflecting.

Where is the calculation mistake in filing of return , can anyone help me with this
Thank you in advance

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Hello @Sweta_Mehta

TDS at 5% is to be deducted for rent payment made and Form 26 QC is to be filed once a year. Since your agreement is over, you have to file the return.

The incorrect amount reflecting in Form 26AS of the landlord is something a user specific issue and we need to verify the return filed by you to help you further.

We have a team of tax experts who can review the return filed by you and help you to file a corrected return if needed to reflect the correct amount in Form 26AS of landlord. You can book a slot using the below link with one of our tax experts:

Book a MEET

Thank you.

14

I have 55000 rent from Oct-1, 2024.
I know i have to pay 2% TDS for the 6 months of FY24-25 which comes to 6600.
Question is can i deduct this amount in February rent and fill the 26QC in feb itself so that i can submit the same in my HR?
2nd when i go to epay tax section and then 26qc section the address under tenant details is directly taken from my AAdhar details. Do i need to change it to current address where i live on rent or it does not matter?

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@Muskan_Balar - In tenant information which is first point the address is getting fetched directly from aadhar. Do i need to change it to the address where i live on rent or is it just for information filling purpose?
Or the property details as you mentioned is in point C so i can let my address be as it is from Aadhar.

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Hello @Ritwik_Bhardwaj

Starting from October 1, 2024, a 2% TDS will be deducted on the rent amount. Additionally, the TDS return must be filed either in the last month of the financial year or on the date the agreement ends. The address will be retrieved from the one saved in the income tax portal. While you have the option to update it, any changes will not have an impact.

17

Rent payment of more than Rs.1 lacs per month to the landlord. Should the TDS be deducted @2% and file Form 26QC every month or quarter at the time of payment or only once in a year at the end e.g. Mar’26? If every month, then there will be 12 monthly Form 26QC in a year or if paid/filed quarterly, there will be 4 quarterly Form 26QC in a year. If paid once a year at the end (Mar’26), shouldn’t this attract an email/notice from the ITD?

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Under Section 194-I, tenants paying rents over ₹50,000 per month must deduct 2% TDS

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@thomas Agreed. But does that mean for a rent of Rs.1 lac/month, the tenant should deduct and pay Rs.2000 to the ITD and file Form 26QC monthly and pay the remaining Rs.98000 to the landlord as monthly rent?

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  • Sec. 194I does not mandate that the tax deduction should be made on a month-to-month basis.
  • Therefore, if the crediting of the rent is done on a quarterly basis, the deduction at the source will have to be made on a quarterly basis only. Where the rent is paid on a yearly basis, deduction also will have to be made once a year on the basis of the actual payment or credit.
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Hey @Vipin ,

You need to deduct the TDS at @ 2% on the annual amount of rent. This will be deducted either from the month of March of the financial year or the last month of your rent agreement, whichever is earlier.

Therefore in your case, if you have paid ₹1L monthly rent for the whole year then you have to deduct ₹24,000 from the rent of March and file form 26QC before 30th April.