{"id":29149,"date":"2025-04-15T00:38:26","date_gmt":"2025-04-14T19:08:26","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=29149"},"modified":"2025-09-03T16:34:37","modified_gmt":"2025-09-03T11:04:37","slug":"section-194-ib-tds-on-rent-paid-by-individuals-or-hufs","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/section-194-ib-tds-on-rent-paid-by-individuals-or-hufs\/","title":{"rendered":"Section 194-IB \u2013 TDS on Rent Paid by Individuals or HUFs"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e14c0f34785\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e14c0f34785\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/section-194-ib-tds-on-rent-paid-by-individuals-or-hufs\/#Overview_of_Section_194-IB_%E2%80%93_TDS_on_Rent_Paid_by_Individuals_or_HUFs\" title=\"Overview of Section 194-IB \u2013 TDS on Rent Paid by Individuals or HUFs\">Overview of Section 194-IB \u2013 TDS on Rent Paid by Individuals or HUFs<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/section-194-ib-tds-on-rent-paid-by-individuals-or-hufs\/#Applicability_of_Section_194-IB\" title=\"Applicability of Section 194-IB\u00a0\">Applicability of Section 194-IB\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/section-194-ib-tds-on-rent-paid-by-individuals-or-hufs\/#Latest_Update_%E2%80%93_Budget_2024\" title=\"Latest Update \u2013 Budget 2024\">Latest Update \u2013 Budget 2024<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/section-194-ib-tds-on-rent-paid-by-individuals-or-hufs\/#Key_Features_of_Section_194-IB-_TDS_on_Rent_Paid_by_Individuals_or_HUFs\" title=\"Key Features of Section 194-IB- TDS on Rent Paid by Individuals or HUFs\">Key Features of Section 194-IB- TDS on Rent Paid by Individuals or HUFs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/section-194-ib-tds-on-rent-paid-by-individuals-or-hufs\/#Compliance_Requirements_TDS_on_Rent_Paid_by_Individuals_or_HUFs\" title=\"Compliance Requirements TDS on Rent Paid by Individuals or HUFs\">Compliance Requirements TDS on Rent Paid by Individuals or HUFs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/section-194-ib-tds-on-rent-paid-by-individuals-or-hufs\/#Overview_of_Section_2011A_with_interest_liability_for_defaults_in_TDS\" title=\"Overview of Section 201(1A) with\u00a0interest liability\u00a0for defaults in TDS \">Overview of Section 201(1A) with\u00a0interest liability\u00a0for defaults in TDS <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/section-194-ib-tds-on-rent-paid-by-individuals-or-hufs\/#In_sullary_Consequences_of_Non-Compliance_of_TDS_on_Rent_Paid_by_Individuals_or_HUFs\" title=\"In sullary Consequences of Non-Compliance of TDS on Rent Paid by Individuals or HUFs\">In sullary Consequences of Non-Compliance of TDS on Rent Paid by Individuals or HUFs<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-29150\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/04\/section-194ib-tds-rate-property-rental.jpg\" alt=\"sec-194ib-tds-rate-property-rental\" width=\"1200\" height=\"630\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/04\/section-194ib-tds-rate-property-rental.jpg 1200w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/04\/section-194ib-tds-rate-property-rental-300x158.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/04\/section-194ib-tds-rate-property-rental-1024x538.jpg 1024w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/04\/section-194ib-tds-rate-property-rental-768x403.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/04\/section-194ib-tds-rate-property-rental-800x420.jpg 800w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Overview_of_Section_194-IB_%E2%80%93_TDS_on_Rent_Paid_by_Individuals_or_HUFs\"><\/span><span style=\"color: #000080;\"><strong>Overview of Section 194-IB \u2013 TDS on Rent Paid by Individuals or HUFs<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"Applicability_of_Section_194-IB\"><\/span><span style=\"color: #000080;\"><strong>Applicability of Section 194-IB\u00a0<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Any individual or Hindu Undivided Family (HUF) (not covered under tax audit under Section 44AB) who pays monthly rent exceeding \u20b950,000 is required to deduct TDS @ 5% under Section 194-IB.<\/p>\n<p>Definition of \u201cRent\u201d Under 194-IB : \u201cRent\u201d includes any payment under lease, sub-lease, tenancy, or agreement for the use of land, building, or both (excluding plant\/machinery\/furniture).<\/p>\n<p>Paying monthly rent &gt; INR 50,000 in FY 2024\u201325? You&#8217;re mandated to deduct and deposit TDS under Section 194-IB of the Income Tax Act, 1961<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Latest_Update_%E2%80%93_Budget_2024\"><\/span><span style=\"color: #000080;\"><strong>Latest Update \u2013 Budget 2024<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>From October 1, 2024, the TDS rate under Section 194-IB has been reduced from 5% to 2% for qualifying individuals and HUFs.<\/p>\n<ul>\n<li>Rate before 30.09.2024: 5%<\/li>\n<li>Rate from 01.10.2024 onward: 2%<\/li>\n<li><em>Note: 3.75% was applicable for a temporary period (14.05.2020\u201331.03.2021)<\/em><\/li>\n<\/ul>\n<p>Form 26QC Deadline: 30th April 2025 (for full FY)<\/p>\n<p>TDS Rates:<\/p>\n<p>\u25aa\ufe0f 5% \u2013 For rent paid between 01.04.2024 to 30.09.2024<\/p>\n<p>\u25aa\ufe0f 2% \u2013 For rent paid from 01.10.2024 onwards (Budget 2024 change)<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Key_Features_of_Section_194-IB-_TDS_on_Rent_Paid_by_Individuals_or_HUFs\"><\/span><span style=\"color: #000080;\"><strong>Key Features of Section 194-IB- TDS on Rent Paid by Individuals or HUFs<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ol>\n<li>Who Should Deduct TDS?\n<ul>\n<li>Individuals\/HUFs not liable to tax audit under Section 44AB, i.e., turnover:\n<ul>\n<li>Less than \u20b91 crore (business)<\/li>\n<li>Less than \u20b950 lakh (profession)<\/li>\n<\/ul>\n<\/li>\n<li>Covered even if they are under presumptive taxation schemes (Sections 44AD, 44AE).<\/li>\n<\/ul>\n<\/li>\n<li>When to Deduct TDS?<br \/>\nTDS must be deducted at the earlier of:<\/p>\n<ul>\n<li>Time of credit of rent for the last month of the financial year or tenancy period<\/li>\n<li>Time of actual payment (cash, cheque, or electronic)<\/li>\n<\/ul>\n<\/li>\n<li>TAN Not Required:\n<ul>\n<li>Deduction under 194-IB does not require obtaining TAN (Section 203A not applicable).<\/li>\n<li>Only PAN of the deductor and landlord is needed.<\/li>\n<\/ul>\n<\/li>\n<li>Maximum Deductible TDS:<br \/>\nUnder Section 206AA, if the landlord does not provide PAN, TDS @ 20% applies.<br \/>\nHowever, deduction should not exceed the rent amount of the last month of the tenancy\/financial year.<\/li>\n<\/ol>\n<h3><span class=\"ez-toc-section\" id=\"Compliance_Requirements_TDS_on_Rent_Paid_by_Individuals_or_HUFs\"><\/span><span style=\"color: #000080;\"><strong>Compliance Requirements TDS on Rent Paid by Individuals or HUFs<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li><strong>Form 26QC:<\/strong>\n<ul>\n<li>Challan-cum-statement to be filed <strong>within 30 days<\/strong> from the end of the month in which rent is paid\/due.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Form 16C:<\/strong>\n<ul>\n<li>TDS certificate to be issued by the tenant to the landlord <strong>within 15 days<\/strong> from the due date of Form 26QC filing.<\/li>\n<\/ul>\n<\/li>\n<li>TAN not required \u2013 Only PAN-based remittance is sufficient and Applicable irrespective of the tax regime (old\/new)<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Overview_of_Section_2011A_with_interest_liability_for_defaults_in_TDS\"><\/span><strong>Overview of Section 201(1A) with\u00a0interest liability\u00a0for defaults in TDS <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Section 201(1A) deals with\u00a0interest liability\u00a0for defaults in:<\/p>\n<ul>\n<li>Deduction of TDS\u00a0\u2013 when tax should have been deducted but wasn\u2019t.<\/li>\n<li>Payment of TDS\u00a0\u2013 when tax was deducted but not deposited on time.<\/li>\n<\/ul>\n<p>Interest Rates &amp; Calculation : In case of taxpayer failure to deduct TDS, 1% per month or part thereof. Required to be pay for the period From the date tax was deductible (i.e., date of payment or credit) to the actual date of deduction. In case Taxpayer Failure to Deposit TDS After Deduction<\/p>\n<ul>\n<li>Rate: 1.5% per month or part thereof.<\/li>\n<\/ul>\n<ul>\n<li>Period: From the date of deduction to the actual date of deposit. Even a delay of one day counts as a full month for interest calculation. Interest is calculated in\u00a0calendar months, not based on actual days. and Any part of a month is treated as a full month. Examples<\/li>\n<\/ul>\n<table style=\"height: 472px;\" width=\"688\">\n<tbody>\n<tr>\n<td width=\"274\"><strong>Example 1: Late Payment<\/strong><\/p>\n<p>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 TDS deducted: INR 1,00,000 on April 30<\/p>\n<p>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Due date: May 7<\/p>\n<p>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Actual payment: June 10<\/p>\n<p>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Interest: INR 1,00,000 \u00d7 1.5% \u00d7 3 months = INR 4,500<\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>\u00a0<\/strong><\/td>\n<td width=\"279\"><strong>Example 2: Late Deduction + Late Payment<\/strong><\/p>\n<p>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 TDS liability: \u20b91,00,000<\/p>\n<p>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Deducted in May instead of April<\/p>\n<p>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Paid on June 10<\/p>\n<p>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Interest:<\/p>\n<p>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Late deduction: INR 1,00,000 \u00d7 1% \u00d7 2 months = INR 2,000<\/p>\n<p>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Late payment: INR 1,00,000 \u00d7 1.5% \u00d7 2 months = INR 3,000<\/p>\n<p>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Total Interest: INR 5,000<\/p>\n<p><strong>\u00a0<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><strong>Disallowance of Interest <\/strong>: Interest paid under Section 201(1A) cannot be claimed as a business expense. It is a permanent difference for tax purposes No Deferred tax asset is created. Taxpayers follow the best practices to Avoid Interest, Taxpayer required to deduct and deposit TDS on time. Maintain a compliance system in the company &amp; reconcile TDS records regularly.<\/p>\n<p><strong>Other applicable Additional Penalties : Following additional penal consequences <\/strong><\/p>\n<ul>\n<li>Section 271C: Penalty up to 100% of the TDS amount.<\/li>\n<li>Section 271H: Penalty for late filing of TDS returns (\u20b910,000 to \u20b91,00,000).<\/li>\n<\/ul>\n<p>Section 276B: Prosecution for willful default (3 months to 7 years imprisonment + fine).<\/p>\n<h3><span class=\"ez-toc-section\" id=\"In_sullary_Consequences_of_Non-Compliance_of_TDS_on_Rent_Paid_by_Individuals_or_HUFs\"><\/span><span style=\"color: #000080;\"><strong>In sullary Consequences of Non-Compliance of TDS on Rent Paid by Individuals or HUFs<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Interest @ 1% per month \u2013 Section 201(1A)<\/li>\n<li>Late filing fee @ \u20b9200\/day \u2013 Section 234E (max: TDS amount)<\/li>\n<li>Penalty up to TDS amount \u2013 Section 271H<\/li>\n<li>Possible Scrutiny\/Notices from Income Tax Department<\/li>\n<\/ul>\n<p>Don\u2019t miss this! Deduct, deposit, and file on time to stay compliant.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Overview of Section 194-IB \u2013 TDS on Rent Paid by Individuals or HUFs Applicability of Section 194-IB\u00a0 Any individual or Hindu Undivided Family (HUF) (not covered under tax audit under Section 44AB) who pays monthly rent exceeding \u20b950,000 is required to deduct TDS @ 5% under Section 194-IB. Definition of \u201cRent\u201d Under 194-IB : \u201cRent\u201d &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[10299],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/29149"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=29149"}],"version-history":[{"count":4,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/29149\/revisions"}],"predecessor-version":[{"id":29794,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/29149\/revisions\/29794"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=29149"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=29149"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=29149"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}