Section 194IB: TDS on Rent 2026 — The ₹50,000-a-Month Rule That Makes Tenants Deduct Tax, Not Landlords

By Nitish Bharadwaj · Published Aug 13, 2026 · 5 min

Section 194IB requires individuals and HUFs who aren't subject to a tax audit to deduct 2% TDS on rent exceeding ₹50,000 a month, paid to a resident landlord — rising to 20% if the landlord doesn't share a PAN, capped at that month's rent. Unlike Section 194I, it's deducted only once a year, filed via Form 26QC using just PAN (no TAN), with Form 16C issued to the landlord. This guide covers the rate, the filing deadlines, the penalty for missing it, and why an NRI landlord changes the rule entirely.

Pay more than ₹50,000 a month in rent as an individual or HUF, and Section 194IB puts the tax-deduction obligation on you, the tenant — not on your landlord, and not through an employer's payroll TDS. It's one of the few TDS provisions where an ordinary salaried person with no business income becomes personally responsible for deducting tax, filing a return for it, and issuing a certificate, all without ever needing a TAN.

Who Has to Deduct, and On What

The Rate Depends on Whether Your Landlord Gives You a PAN

TDS under Section 194IB is deducted at 2% of the rent, provided the landlord furnishes their PAN — a rate that was cut from 5% to 2% effective October 1, 2024. Without a PAN, the rate jumps to 20%, though the total TDS in that case can never exceed the actual rent payable for the last month or part of the tenancy — the law caps the deduction at what's actually being paid out, so a tenant is never forced to deduct more tax than the rent itself.

Deducted Once a Year, Not Every Month

This is the detail that trips up tenants used to hearing about TDS as a monthly deduction. Section 194IB is deducted only once in a financial year — at the time rent is credited or paid for March, or for the last month of the tenancy if the property is vacated earlier, whichever comes first. A tenant paying ₹60,000 a month doesn't deduct 2% every month and remit it monthly; the full year's TDS is computed and deducted in one shot at that single point, which is also why the compliance burden is lighter than Section 194I — the version of this rule that applies to businesses and audited taxpayers, who do deduct monthly and do need a TAN.

Filing It — Form 26QC and Form 16C

1. Deduct the TDS at the applicable rate when rent is credited or paid for March, or the last month of the tenancy.
2. File Form 26QC — a combined challan-and-statement — online through the income tax e-filing portal, using your PAN and your landlord's PAN. No TAN is required at any stage.
3. Pay the deducted TDS along with the Form 26QC filing, within 30 days from the end of the month in which the deduction was made.
4. Download and issue Form 16C to your landlord within 15 days of filing Form 26QC — this is their proof that tax was deducted on your rent payments.

If Your Landlord Lives Abroad, This Section Doesn't Apply

Section 194IB only covers rent paid to a resident landlord. Rent paid to a non-resident landlord — an NRI owner, for instance — falls under Section 195 instead, which has no ₹50,000 threshold, applies from the first rupee of rent, and is deducted at rates that can run well above 2% once surcharge and cess are added. A tenant who assumes the familiar 194IB rules apply just because the rent crosses ₹50,000 a month, without first confirming the landlord's residential status, risks under-deducting tax on a payment that actually needed the stricter Section 195 treatment.

This Runs Alongside Your Own HRA or 80GG Claim, Not Instead of It

Deducting TDS under 194IB is a compliance obligation on the rent you pay out — it has nothing to do with whether you can claim HRA exemption or a Section 80GG deduction on that same rent for your own return. Both can apply together: a salaried tenant paying ₹55,000 a month deducts 2% TDS under 194IB as the payer, and separately claims HRA exemption (or 80GG, if HRA isn't part of the salary structure) as the taxpayer, on the same rent paid. Our Section 80GG guide covers that second, separate claim in detail. And if it's the sale of a property rather than monthly rent that's triggering a TDS question, that's governed by an entirely different provision — our TDS on sale of property guide covers Section 194IA's 1% rule instead.