When does TDS on rent apply?
TDS applies under Section 194-IB when an individual or HUF pays rent exceeding ₹50,000 per month. The tenant must deduct 5% TDS from the rent before paying the landlord. This applies to rent for land, building, furniture, or fittings.
What is Form 26QC?
Form 26QC is a challan-cum-statement used by tenants to deposit TDS on rent with the government. It must be filed online on the TRACES/TIN-NSDL portal. After filing, you must issue Form 16C (TDS certificate) to your landlord within 15 days.
When is TDS on rent deposited?
TDS on rent is not deducted monthly. It is deducted once — from the last month's rent of the financial year (March) OR the last month of tenancy, whichever comes first. It must be deposited within 30 days from the end of that month.
What if the landlord doesn't have a PAN?
If the landlord fails to provide their PAN, the TDS rate doubles from 5% to 20% under Section 206AA. Always collect your landlord's PAN before signing the rent agreement to avoid this penalty rate.
What is Form 15G/15H and how does it help?
Form 15G (for non-seniors) and 15H (for senior citizens) are self-declarations that the landlord's total income is below the taxable limit. If submitted to the tenant, TDS may be nil. However, the tenant must verify eligibility before accepting it.
What happens if I don't deduct TDS?
If TDS is not deducted when applicable, the tenant is treated as an "assessee in default." Penalty includes interest at 1% per month for non-deduction and 1.5% per month for non-deposit, plus a penalty equal to TDS amount under Section 271C.
Does TDS apply to commercial rent?
Section 194-IB applies only to individuals and HUFs, not businesses. If a company or firm is paying rent, TDS at 10% applies under Section 194-I (threshold: ₹2.4 lakh/year). This calculator covers only Section 194-IB (individual/HUF tenants).
Can the landlord claim TDS credit?
Yes. The TDS you deposit via Form 26QC will appear in the landlord's Form 26AS. They can claim it as advance tax paid while filing their ITR. Always share Form 16C with your landlord after depositing TDS.