## Section 194IB — TDS on Rent by Individuals/HUF

### Applicability

Section 194IB applies when:

Rent > ₹50,000 per month, AND
Payer is a Non-HIJACR Assessee

### Who is a Non-HIJACR Assessee?

An individual/HUF is a Non-HIJACR Assessee if:

The assessee does NOT have PGBP income, OR
The assessee has PGBP income but:
Turnover < ₹1 Crore (Business), OR
Gross Receipts < ₹50 Lakhs (Profession)

### Why this matters

Such small payers (housewives, salaried individuals, small businesses) are exempted from regular TDS u/s 194I but must comply with the simpler 194IB if monthly rent exceeds ₹50,000.

### Rate & Mechanism

→ TDS at 2% (w.e.f. 01.10.2024) on the rent paid for the last month of the year or last month of tenancy.

Worked example

### Example 1

Example 1: Mr. A, a salaried employee (no PGBP income), pays rent of ₹60,000 per month for his residence.

Analysis: Mr. A is a Non-HIJACR Assessee, and rent > ₹50,000 → TDS u/s 194IB applicable.

Example 2: Mr. B is a businessman with turnover of ₹2 Crore. He pays house rent of ₹70,000 per month.

Analysis: Mr. B's turnover exceeds ₹1 Crore → he is a HIJACR assessee → 194IB NOT applicable (Section 194I applies instead if it's for business purposes).

Example 3: Mrs. C is a doctor with gross receipts of ₹40 Lakhs. She pays personal rent of ₹55,000/month.

Analysis: GR < ₹50 Lakhs → Non-HIJACR → 194IB applicable.

⚠️ Common exam mistakes

Confusing 194I and 194IB — 194I is for businesses above audit threshold; 194IB is for Non-HIJACR payers.
Applying ₹50,000 as annual limit instead of monthly limit.
Treating professionals with GR ≥ ₹50 Lakhs as Non-HIJACR — they are HIJACR.
Forgetting that an individual without PGBP income is automatically Non-HIJACR.

Bare-Act text Section 194IB · Income-tax Act, 1961 · click to expand

Sec 194IB is applicable when Rent > 50,000 and Payer is Non-HIJACR Assessee: Assessee not having PGBP Income, or Assessee having PGBP Income but T/O < 1Cr / GR < 50 Lacs.

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Section 194IB - TDS on Rent by Non-HIJACR Assessees

Worked example

⚠️ Common exam mistakes