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Tds on rent to two persons

02 March 2025

Iam paying rent to residence to two owners 40k each per month. Total rent paid is 80k per month.Is it necessary to deduct tds in this case?

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4 Replies

Rama chary Rachakonda (Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294) (7082 Points)
Replied 02 March 2025

As a tenant paying rent to two owners, you'll need to consider the TDS (Tax Deducted at Source) implications. TDS Threshold: The TDS threshold for rent payments is ₹2,40,000 per annum (Section 194-I of the Income Tax Act, 1961). Since you're paying a total rent of ₹80,000 per month (₹9,60,000 per annum), you exceed this threshold. TDS Applicability: As the total rent paid exceeds the threshold, TDS is applicable. However, since you're paying rent to two owners, you'll need to consider their individual shares. TDS Calculation: Assuming both owners have an equal share (40,000 each), you'll need to deduct TDS on each payment. The TDS rate is typically 5% for rent payments (Section 194-I). TDS Compliance: To comply with TDS regulations: 1. Obtain the PAN (Permanent Account Number) of both owners.

2. Deduct TDS at 5% on each rent payment (₹2,000 per owner, per month).

3. Deposit the TDS with the government using Challan 281.

4. File Form 26Q (quarterly TDS return) and provide the owners with Form 16A (TDS certificate).

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Nikhil Kaushik (Fellow CA) (86465 Points)
Replied 02 March 2025

if your query is for rent being paid by an individual in his personal copacity for the purpose of residential property, then in this case TDS woul not apply. If not, then the above response shall be followed.

Sunil Bafna (44 Points)
Replied 03 March 2025

Ok thanks. The tds is applicable if I pay more than 50000 per month to each owner.I.e. Rs 6lacs per year to each owner.Is it correct. ?

Kartik verma (Content writer) (39 Points)
Replied 27 March 2025

Yes, as per the Income Tax Act, TDS on rent is applicable under Section 194I or Section 194IB, depending on the payer's status. Here's how it applies in your case:

If you are an individual or HUF (not under audit):

Section 194IB applies if the total rent paid exceeds ₹50,000 per month.
Since you are paying ₹40,000 each to two owners (₹80,000 total), but no single owner receives more than ₹50,000, TDS under Section 194IB is not applicable.

If you are a Business (subject to audit):

Section 194I applies if the total rent paid exceeds ₹2,40,000 per year per owner.
Since you are paying ₹4,80,000 annually to each owner, TDS @ 10% must be deducted and deposited with the government.