TDS on Rent Income for Landlords in India (2026 Rules)

When does TDS on rent apply in India in 2026?

There is no single TDS rule for every rent payment. First identify the payment date and payer. Payments or credits up to 31 March 2026 remain governed by the Income-tax Act, 1961 provisions commonly cited as Sections 194IB and 194I. For payments or credits from 1 April 2026, the corresponding withholding entries sit in Section 393 of the Income-tax Act, 2025. The Income Tax Department confirms that the transition retained the substantive rates and monetary thresholds.

• Up to 31 March 2026: use the applicable 1961 Act section and legacy form
• From 1 April 2026: use the corresponding Section 393 table entry under the 2025 Act
• Specified individual or HUF tenant rule: 2% if monthly rent to a resident landlord exceeds Rs 50,000
• Business and audit-liable payer rule: generally 10% for land or building rent above the retained threshold
• Section 194I threshold moved from Rs 2.4 lakh per year to Rs 50,000 per month from April 1, 2025
• Section 194IB does not require TAN; Section 194I normally does
• NRI landlords are outside these rules and usually fall under Section 195

Individual and HUF residential tenants: 2% rule

The specified individual or HUF tenant rule applies when the payer is outside the regular business TDS category and monthly rent to a resident landlord exceeds Rs 50,000. The retained rate is 2%. For deductions tied to payments through 31 March 2026, the familiar compliance references are Section 194IB and Form 26QC. For qualifying events from 1 April 2026, use the corresponding Section 393 entry and the new Form 141 workflow shown by the Income Tax Department.

• Rate: 2%
• Threshold: monthly rent above Rs 50,000
• Who deducts: individuals and HUFs not liable to tax audit
• Up to 31 March 2026: Form 26QC workflow
• From 1 April 2026: Form 141 challan-cum-statement workflow

Business and audit-liable payers: 10% building-rent rule

Companies, firms, LLPs, and individuals or HUFs within the regular TDS category generally apply the business-payer rent rule. The rate for land or building rent remains 10%, and the monthly Rs 50,000 threshold introduced from 1 April 2025 remains relevant. Use Section 194I terminology for events up to 31 March 2026 and the corresponding Section 393 table entry for events from 1 April 2026.

• Rate for land or building rent: 10%
• Rate for plant, machinery, or equipment: 2%
• Threshold from April 1, 2025: Rs 50,000 for a month or part of a month
• Usual compliance: TAN, monthly deposit, and quarterly Form 26Q returns
• From 1 April 2026, quote the corresponding Section 393 table entry rather than the old section number

What landlords should check in Form 26AS and ITR

TDS deducted by the tenant is only a tax credit, not the final tax on the landlord. Landlords must still declare the gross annual rent under 'Income from House Property', deduct municipal taxes actually paid, claim the standard deduction of 30% of net annual value, and claim eligible interest on borrowed capital if applicable. After the tenant files Form 26QC or quarterly TDS returns, the landlord should verify the credit in Form 26AS or the AIS before filing the return.

• Report rental income under Schedule HP in the ITR
• Standard deduction: 30% of net annual value
• Municipal taxes paid by landlord are deductible
• Interest on borrowed capital may be claimed separately
• Match tenant TDS with Form 26AS or AIS before filing

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Special rule if the landlord is an NRI

If the landlord is non-resident, tenants generally move out of Section 194IB or 194I and into Section 195. That is a different regime with no Rs 50,000 monthly threshold and a much higher default deduction burden unless a lower-deduction certificate is obtained. If the landlord is an NRI, tenants should not rely on the resident-landlord rules explained above.

NRI landlord rent agreement guide