TDS on Rent Paid by Certain Individuals or Hindu Undivided Families
Certain individuals and Hindu undivided families paying rent to a resident landlord must deduct tax at source when the statutory conditions are met. From 1 April 2026, this special PAN-based rent TDS rule is contained in Section 393(1), Table Serial No. 2(i) of the Income-tax Act, 2025.
Who is covered by the special individual/HUF rent TDS rule?
The provision is intended for an individual or Hindu undivided family paying qualifying rent to a resident payee where the special Section 393(1) category applies. Individuals and HUFs already falling within the ordinary rent-TDS provision because of their business or professional status must identify the correct Section 393 table item rather than automatically using this special PAN-based category.
Meaning of rent
For this category, rent broadly means payment, by whatever name called, under a lease, sub-lease, tenancy or other agreement or arrangement for the use of land, a building, or land and building. The nature of the arrangement, rather than merely the label used by the parties, is therefore important.
Monthly rent threshold
The special provision applies when rent crosses the monetary limit prescribed for this individual/HUF category. The legacy Section 194-IB threshold was rent exceeding Rs. 50,000 for a month or part of a month. For a current transaction, the threshold and rate should be verified under Section 393 and the Finance Act applicable to the relevant tax year.
When is the tax deducted?
This category is designed so that tax is generally deducted at the end of the tax year or at the end of the tenancy if the property is vacated earlier, subject to the statutory payment or credit rule. The current Form 141 Schedule A specifically asks whether deduction arises because of the end of the tax year or the end of the tenancy.
Form 141 Schedule A for rent TDS
The Income Tax Department's Form 141 user manual identifies Schedule A for TDS on rent paid by an individual or HUF under Section 393(1), Table Serial No. 2(i). Form 141 applies to resident deductees and is filed through the deductor's PAN login on the e-Filing portal.
Schedule A requires information about the rented property, all tenants or lessees, all landlords or payees, tenancy period, total rent for the tax year, rent for the last month, deductee-wise TDS and tax-deposit details. Where there are co-tenants or multiple landlords, the form captures their respective proportions.
Lower deduction certificate
Form 141 also provides for a lower deduction certificate under Section 395(1). Where such a certificate is applicable, its number and the authorized deduction rate are reported in the form.
Transition from Section 194-IB to Section 393
| Period / transaction | Applicable law | Provision / reporting |
|---|---|---|
| Rent transaction governed by law up to 31 March 2026 | Income-tax Act, 1961 | Section 194-IB / Form 26QC |
| Qualifying rent transaction from 1 April 2026 | Income-tax Act, 2025 | Section 393(1), Table Serial No. 2(i) |
| Current challan-cum-statement | Income-tax Rules, 2026 | Form 141, Schedule A |
Legacy Section 194-IB of the Income-tax Act, 1961
The uploaded historical text records a 5 percent TDS rate. That was the rate for the version represented by the source page; the rate was subsequently amended, so it should not be applied automatically to later financial years.
Legacy timing rule
Under Section 194-IB, tax was deducted at the time of credit of rent for the last month of the previous year, or the last month of tenancy where the property was vacated during the year, or at the time of payment, whichever was earlier.
No TAN requirement under legacy Section 194-IB
The legacy provision expressly stated that Section 203A did not apply to a person required to deduct tax under Section 194-IB. Accordingly, this special category was designed as a PAN-based compliance mechanism rather than the ordinary TAN-based TDS process.
Protection where higher deduction applied for PAN default
The uploaded legacy provision also stated that where tax was required to be deducted under Section 206AA, the deduction could not exceed the amount of rent payable for the last month of the previous year or the last month of tenancy, as applicable.
Practical compliance checklist
Confirm the landlord is resident: Form 141 applies to resident deductees. Payments to a non-resident landlord require examination under the non-resident TDS provisions.
Check which rent category applies: distinguish the special individual/HUF rule from ordinary rent TDS applicable to other deductors.
Check the monthly threshold: determine whether the rent crosses the statutory limit for the relevant tax year.
Determine the deduction month: identify the end of the tax year or earlier end of tenancy and apply the statutory timing rule.
Use Form 141 Schedule A: for qualifying current transactions, report the property, tenants, landlords, rent and TDS through the PAN-based challan-cum-statement.
Verify current rate: apply the rate prescribed by Section 393 and the Finance Act for the relevant tax year, including any applicable higher or lower deduction provision.
Related Income Tax provisions
Rent TDS: legacy Section 194-I
TDS on transfer of immovable property: legacy Section 194-IA
TDS on payment under specified agreement: legacy Section 194-IC
Commission, brokerage and property TDS
Always verify the rate, threshold, residential status and reporting requirement for the tax year in which the deduction arises.