TDS on Rent 2026-27: Rate, Limit, Due Date and Form 141 (Income-tax Act, 2025)

Under the Income-tax Act, 2025, tax on rent paid to a resident is deducted under section 393(1), Table Sl. No. 2. The rate is 2% for most individuals and HUFs, and 10% for land, buildings, furniture and fittings when the payer is a "specified person". The threshold is Rs 50,000 for a month or part of a month. The Income-tax Rules, 2026 set the deposit dates and forms.

Rent TDS has one home in the new Act, split into two rows by who pays. For the full rate table across payment types, see the TDS rates chart under section 393. This guide walks through who deducts, at what rate, when, and how to deposit and report it. Every figure below is taken from the Act (as amended by the Finance Act, 2026) and the Rules, with the section or rule number next to it so you can check it. Last reviewed against that text on 10 November 2026.

What is the TDS rate on rent under the Income-tax Act, 2025?

	Payer is NOT a specified person (Sl. No. 2(i))	Payer IS a specified person (Sl. No. 2(ii))
Rate	2%	2% for machinery, plant, equipment 10% for land, building, factory building, appurtenant land, furniture, fittings
Threshold	Rs 50,000 for a month or part of a month	Rs 50,000 for a month or part of a month
When tax is deducted	On credit or payment of rent for the last month of the tax year or the last month of the tenancy, whichever is earlier (Note 1)	At the time of credit or payment, whichever is earlier (section 393(1)(c))
Deposit	Within 30 days from the end of the month of deduction, with Form 141 (rule 218(3))	By the 7th of the following month; 30 April for March (rule 218(2))
TAN needed?	No (section 397(1)(c)(i))	Yes

What counts as "rent" for TDS?

Section 402(29) defines rent as any payment, by whatever name called, under a lease, sub-lease, tenancy or any other agreement or arrangement for the use of land, a building (including a factory building), land appurtenant to a building, machinery, plant, equipment, furniture or fittings. It applies whether or not the payee owns these assets.

One restriction matters for the lower-rate row. For Sl. No. 2(i), only payments for land, buildings and appurtenant land are treated as rent. Rent for machinery, plant, equipment, furniture or fittings is picked up only by Sl. No. 2(ii), which applies to specified persons.

Who is a "specified person" for TDS on rent?

The rate you use depends on this definition in section 402(37). A specified person is:

• any person that is not an individual or HUF (companies, firms, LLPs, trusts and so on); or
• an individual or HUF whose total sales, gross receipts or turnover from business or profession in the immediately preceding tax year exceeded Rs 1 crore for business or Rs 50 lakh for profession.

So a salaried tenant, or a small trader below those limits, falls under Sl. No. 2(i). A company, a firm, or a doctor with Rs 60 lakh of gross receipts last year falls under Sl. No. 2(ii).

How is TDS on rent calculated? Two worked examples

	Case 1: individual, not a specified person	Case 2: company paying for an office building
Rent	Rs 60,000 a month (Rs 7,20,000 a year)	Rs 1,20,000 a month
Row	Sl. No. 2(i)	Sl. No. 2(ii), building
Rate	2%	10%
Tax deducted	Rs 14,400, once, when March rent is paid or credited	Rs 12,000 every month
Deposit	Within 30 days from the end of that month, with Form 141	By the 7th of the next month; March tax by 30 April

These cases are illustrations built from the Table and Note 1. Check the facts of an actual tenancy (for example, rent on mixed property, or rent that changes during the year) before applying them.

What if the landlord does not give a PAN?

Under section 397(2), the payee must furnish a valid PAN to the person deducting tax. If the PAN is not furnished, tax is deducted at the higher of the rate in the relevant provision, the rate or rates in force, or 20% (section 397(2)(b)(i)).

For rent under Sl. No. 2(i) there is a cap: where tax is deducted at this higher rate, the deduction cannot exceed the rent payable for the last month of the tax year or the last month of the tenancy (section 397(2)(e)). In Case 1, 20% of Rs 7,20,000 is Rs 1,44,000, but the deduction is capped at March's rent of Rs 60,000. The cap does not apply when a PAN has been given and tax is deducted at the normal 2%.

When is TDS on rent not deducted?

• Rent within the threshold. The threshold is Rs 50,000 for a month or part of a month, so rent up to that level in a month does not attract deduction under Sl. No. 2.
• Rent paid to a REIT. Section 393(4), Table Sl. No. 2, says no tax is deducted on rent credited or paid to a business trust that is a real estate investment trust, for real estate assets it owns directly.
• Rent paid to a non-resident. Section 393(1) covers payments to residents. Payments to non-residents fall under section 393(2) and are outside this guide; see TDS on payments to non-residents.

How do you deposit and report TDS on rent?

• Non-specified payers (Sl. No. 2(i)): deposit within 30 days from the end of the month in which tax is deducted, with a challan-cum-statement in Form No. 141 (rule 218(3)(a) and rule 219(5)(a)). This takes the place of the quarterly statement.
• Specified payers (Sl. No. 2(ii)): deposit by the 7th of the following month, or 30 April for tax deducted in March (rule 218(2)). Report in the quarterly statement, Form No. 140 for deductees other than non-residents (rule 219(1)).
• Quarterly statement due dates (rule 219(4)): 31 July, 31 October, 31 January and 31 May, for the quarters ending 30 June, 30 September, 31 December and 31 March.

To estimate tax and the interest on a late deposit (the consequences of failure to deduct or deposit go beyond interest), use the TDS calculator and the TDS interest calculator. If you file returns for clients, see our guide to TDS return filing software for CA firms.

Can the landlord ask for a lower or nil deduction?

Yes. A landlord can apply to the Assessing Officer under section 395(1) for deduction at a lower rate or no deduction. A valid PAN is needed: if a declaration under section 393(6) or 394(2) does not carry the payee's PAN, it becomes invalid, and an application under section 395(1) or (3) without a PAN gets no certificate (section 397(2)(f)).

What are the common mistakes with TDS on rent?

• Using the wrong row. Check turnover for the preceding tax year before choosing between 2(i) and 2(ii).
• Treating furniture or machinery rent as 2(i). Only land and buildings count there.
• Forgetting the Rs 50,000 limit is monthly. It is tested for a month or part of a month, not on annual rent.
• Missing the 30 April date. Tax deducted in March from a specified person's rent is due on 30 April, not 7 April.
• Skipping Form 141. For Sl. No. 2(i), the deposit has to be accompanied by Form 141 within 30 days.
• Ignoring a missing PAN. Without it, the rate goes to the higher of the normal rate and 20%.

How do CA firms track TDS on rent across clients?

For a CA firm, the work is not the calculation. It is knowing which of your clients are specified persons this year, which monthly deposits are due, and which clients still need Form 141 filed. Finexo's practice management software tracks these deadlines across your client book and reminds you and your clients before they pass. It does not compute TDS or file the forms for you.

This article explains the Income-tax Act, 2025 (as amended by the Finance Act, 2026) and the Income-tax Rules, 2026. It is general information, not tax advice. Confirm the position for a specific case with a qualified chartered accountant.