# Section 194I — TDS on Rent

## Who deducts?

Payer: Any person except Individual / HUF with previous-year business turnover ≤ ₹1 cr / profession receipts ≤ ₹50 L. (For Ind/HUF NOT covered here — see 194IB.)
Payee: Resident.

## Threshold

Aggregate rent > ₹50,000 per month (or part of month).

## Rate

Asset	Rate
Plant & Machinery / equipment	2%
Land, Building, Furniture, Fittings	10%

## What is 'rent'?

Payment, by any name, under lease/sub-lease/tenancy/any other agreement for the use of — land, building (including factory), machinery, plant, equipment, furniture, fittings.

Worked example

### Example 1

Example: Co. pays ₹70,000 p.m. for office building. TDS = 10% of ₹70,000 = ₹7,000 every month.

### Example 2

Example: Plant hired at ₹60,000 p.m. — TDS = 2% of ₹60,000 = ₹1,200.

### Example 3

Example: Office rent ₹45,000 p.m. — no TDS (does not exceed ₹50,000 p.m.).

⚠️ Common exam mistakes

Applying 10% on plant & machinery (correct rate is 2%).
Ignoring the new monthly threshold of ₹50,000 (Finance Act, 2025 changed it from ₹2,40,000 p.a. to ₹50,000 p.m.).
Applying 194I when payer is Individual / HUF below 44AB threshold (then 194IB applies).

Reference: 194I

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Section 194I — Rent

Worked example

⚠️ Common exam mistakes