TDS on Rent — Section 194-IB (Form 26QC & 16C)

Section 194-IB — Income-tax Act, 1961
Inserted by Finance Act 2017, effective 1 June 2017. Applies to every individual or HUF (other than those covered by Section 194-I) responsible for paying to a resident any income by way of rent exceeding ₹50,000 per month or part of month. Rate: 5%. Rate without PAN: 20% (Section 206AA).

Rule 30(2)(BC) — due date for Form 26QC
TDS under Section 194-IB must be deposited within 30 days from the end of the month in which deduction is made. For deductions in March, due date is 30 May.

Section 203 / Rule 31(3B) — Form 16C
Deductor (tenant) must furnish Form 16C within 15 days from the due date for furnishing Form 26QC.

Section 234E — Late filing fee
₹200 per day from the due date until the date on which Form 26QC is furnished, subject to a maximum of the TDS amount.

Section 201(1A) — Interest on late deposit
Interest at 1.5% per month (or part thereof) from the date of deduction to the date of actual payment.

---
ITA 2025 Concordance (in force 1 April 2026 — Income-tax Act 2025, Section 3 defines "tax year")
Section 194-IB [ITA 1961] → Section 393 [ITA 2025] (consolidated non-salary TDS provision; rate schedule covers rent payments by individuals/HUFs)
Section 234E [ITA 1961] → Section 427 [ITA 2025] (fee for default in furnishing TDS/TCS statements)
Section 201(1A) [ITA 1961] → Section 398 [ITA 2025] (Consequences of failure to deduct or pay or collect or pay — includes interest on delayed deposit)
Transition note: AY 2026-27 returns and all transactions up to 31 March 2026 remain governed by ITA 1961 per Section 536(2) (repeal and savings). ITA 2025 sections apply to tax year 2026-27 (1 April 2026 onward).
Section 271H [ITA 1961] → Section 461 [ITA 2025] (Penalty for failure to furnish TDS/TCS statements — applies when Form 26QC/26QD not filed within 1 year of due date)

Section 194-IB (inserted by Finance Act 2017) requires every individual or HUF paying rent of ₹50,000 or more per month to a resident landlord to deduct TDS at 5%. This applies even to individuals not subject to tax audit — it is a standalone obligation for high-value tenants.

Key mechanics:

• TDS is deducted once per financial year — at the time of credit or payment in the last month of the tenancy or the last month of the financial year (whichever is earlier).


• Rate: 5% of the annual rent. If the landlord does not furnish PAN, rate is 20% under Section 206AA.


• Form 26QC is a challan-cum-statement — it functions as both the TDS payment and the return in one form. No quarterly return; filed once per financial year per landlord.


• Due date: 30 days from the end of the month in which TDS was deducted. For amounts deducted in March, the due date is 30 May.


• Form 16C (the TDS certificate) is downloaded from TRACES after filing and given to the landlord.

Who this affects:

• Individuals and HUFs paying office rent above ₹50,000/month


• HUF Kartas paying property rent to family members


• Individuals renting premises from a landlord under a formal lease deed

Consequences of non-compliance:

• Section 234E: ₹200 per day late fee from the due date until the date of filing


• Section 201(1A): Interest at 1.5% per month from date of deduction to date of payment


• Section 271H: Penalty of ₹10,000 to ₹1,00,000 for failure to file 26QC within 1 year of due date