Section 194-IB - TDS on Rent by Individuals/HUF (not covered by 194-I)
# Section 194-IB - TDS on Rent by Certain Individuals or HUF
## Purpose
Covers Individual/HUF payers who are NOT liable to deduct TDS under section 194-I (i.e., turnover ≤ ₹ 1 crore business / ≤ ₹ 50 lakhs profession in preceding F.Y.).
## Who Deducts
Individual / HUF other than those covered by 194-I.
## Payee
Any resident.
## Threshold
Rent > ₹ 50,000 per month or part of a month.
## Rate of TDS
2%.
## When to Deduct
TDS is to be deducted only once — at the time of credit of rent for the last month of the P.Y. OR the last month of tenancy (if property vacated mid-year), OR at the time of payment, whichever is earlier.
> Key Feature: One-time deduction at year-end (or end of tenancy), not monthly.
## Quick Recall
Particular
Details
Threshold
> ₹ 50,000 per month
Rate
2%
Frequency
Once at year-end / end of tenancy
No TAN required
Form 26QC used
Worked example
### Example 1
Example: Mr. S, a salaried individual, pays monthly rent ₹ 60,000 for residential premises throughout F.Y. 2025-26 (12 months).
TDS @ 2% = ₹ 14,400 — deducted ONCE at the end of March 2026 (or when paying March rent).
### Example 2
Example: Mr. T pays ₹ 70,000 p.m. as rent from April 2025 and vacates property on 31 August 2025.
Solution: Rent for 5 months = ₹ 3,50,000.
TDS @ 2% = ₹ 7,000 — deducted at end of tenancy (August 2025).
⚠️ Common exam mistakes
Deducting TDS u/s 194-IB every month — deduction is one-time at year-end / vacation
Applying both 194-I and 194-IB — they are mutually exclusive depending on payer profile
Obtaining TAN — not required; Form 26QC is used
Bare-Act text Section 194-IB · Income-tax Act, 1961 · click to expand
Any person, being an individual or a Hindu undivided family (other than those referred to in the second proviso to section 194-I), responsible for paying to a resident any income by way of rent exceeding fifty thousand rupees for a month or part of a month during the previous year, shall deduct an amount equal to two per cent of such income as income-tax thereon. The tax shall be deducted on such income at the time of credit of rent, for the last month of the previous year or the last month of tenancy, if the property is vacated during the year, as the case may be, to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier.