Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Business tenants — Section 194-I
A business or professional tenant (a company, firm, or individual under audit) deducts 10% TDS on rent for land/building under Section 194-I if the annual rent crosses the threshold (currently around ₹2.4 lakh a year). They need a TAN and file TDS returns.
Individual tenants — Section 194-IB
An ordinary individual or HUF paying rent of more than ₹50,000 a month deducts TDS under Section 194-IB — at a low rate (currently 2%), once a year, without needing a TAN. This targets high-rent residential tenancies. Confirm the current rate and threshold per the Finance Act.
A worked example
Example: a company renting an office for ₹1 lakh a month deducts 10% (194-I) and deposits it. A salaried individual paying ₹60,000 a month for a flat deducts the 194-IB rate once a year on the total. In both cases the landlord sees the TDS in 26AS and credits it in their return. As a landlord, make sure your tenant deducts and reports correctly. Our team can reconcile it.