HRA & Tax
TDS on Rent Income for Landlords in India (2025 Rules)
Updated 13 March 2026 | 7 min read
Quick answer
From FY 2024-25, tenants paying rent of more than ₹50,000 per month must deduct TDS at 2% and file Form 26QC. If annual rent exceeds ₹6,00,000, the tenant must deduct TDS and deposit it with the government. Landlords must report all rental income — including from a single property — in their ITR under 'Income from House Property' after standard deductions. Failure to deduct TDS attracts interest and penalties.
When does TDS on rent apply in India?
TDS on rent is governed by Section 194IB of the Income Tax Act (for individuals/HUFs). As of FY 2024-25: if the monthly rent payable exceeds ₹50,000, the tenant must deduct TDS at 2% from the rent at the time of payment or the end of the financial year (whichever is earlier). The tenant must then file Form 26QC and issue Form 16C to the landlord. This applies even if only one month's rent exceeds ₹50,000.
- TDS rate: 2% (Section 194IB for individuals/HUFs)
- Threshold: monthly rent > ₹50,000
- Filing: Form 26QC within 30 days of end of financial year
- Landlord gets: Form 16C as TDS certificate
- Does not apply to commercial properties — Section 194I has different rules
How landlords report rent income in ITR
All rental income must be declared in the ITR under 'Income from House Property', regardless of whether TDS was deducted. Landlords can claim a standard deduction of 30% of Net Annual Value (after deducting municipal taxes paid) for repairs and maintenance. If a home loan is taken for the rented property, interest paid is additionally deductible. Net rental income is then added to total income and taxed at the applicable slab rate.
- Report under: Schedule HP — Income from House Property in ITR
- Standard deduction: 30% of Net Annual Value (no bills required)
- Additional deduction: Home loan interest on the rented property
- Municipal taxes: deductible if paid by the landlord
- TDS credit: TDS deducted by tenant is reflected in Form 26AS
What is the TDS deduction on rent above ₹50,000/month?
Section 194IB requires tenants (individuals and HUFs not liable for audit) to deduct TDS at 2% if the monthly rent exceeds ₹50,000. This is deducted once a year at the end of the lease or March 31 (whichever is earlier). The tenant must not have a TAN (Tax Deduction Account Number) — they file using their PAN via Form 26QC on the NSDL portal.
Rent income tax implications for salaried landlords
If you are salaried and also receive rental income, both incomes are added and taxed together. Salaried individuals often miss declaring rental income because they assume Form 16 covers everything — it does not. Undeclared rental income can trigger notices from the IT Department, especially if the tenant has filed Form 26QC which shows up in the landlord's Form 26AS. Always report rental income in your ITR even if it is below the basic exemption when combined with salary.
ProRently
Create your rent agreement online - free
Legally valid, Aadhaar-signed rent agreements in 15 minutes. Correct stamp duty for your state. Free to generate - pay Rs 199 + GST only when you download.
Get Started FreeFrequently Asked Questions
What is TDS on rent income for landlords in India?
Tenants paying rent > ₹50,000/month must deduct TDS at 2% and file Form 26QC. Landlords receive Form 16C and must report all rental income in their ITR under 'Income from House Property'.
What is the TDS rate on rent in India 2025?
2% under Section 194IB for residential properties where monthly rent exceeds ₹50,000, paid by individuals/HUFs not subject to audit. For company tenants, Section 194I applies at 10% for rent exceeding ₹2.4 lakh/year.
Does a landlord need to pay tax on rent income below ₹6 lakh per year?
Rental income is added to total income and taxed at the applicable slab. If your total income (salary + rent + other income) is below ₹3 lakh (old regime) or ₹7 lakh (new regime with rebate), you may have zero tax. But you must still declare it in your ITR.
What happens if a tenant does not deduct TDS on rent?
The tenant is liable to pay interest at 1% per month on the TDS amount not deducted, and a penalty equal to the TDS amount not deposited. The landlord is not penalised for the tenant's failure, but the TDS credit in the landlord's Form 26AS will be missing.
Is rental income taxable if I have a home loan on the property?
Yes. Rental income is taxable, but you can deduct home loan interest as a loss from house property (up to ₹2 lakh/year for self-occupied; unlimited for let-out). This can significantly reduce your tax on rental income.