Form 26QC: TDS on Rent of Property

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Hiral Vakil

Form 16C
Form 26QC
TDS
TIN NSDL
Last updated on February 15th, 2023

As per the Finance Act 2017, if any individual or HUF to whom tax audit is not applicable makes payment of rent to a resident landlord exceeding INR 50,000 per month, then they are required to deduct TDS u/s 194IB. Also, Form 26QC needs to be filed by the tenant on TIN NSDL. This section is being introduced to cover the high rental income group within the preview of tax.

Who needs to file Form 26QC?

The tenant of the property, who is making rent payments to the resident landlord needs to file this form. Also, TDS is deducted at 5% of the total rent payments made by the tenant.  

When to deduct TDS?

TDS should be deducted once in a financial year. Further, It can be deducted either at the time of credit of rent to the account of the payee for the last month of the financial year. Also, if the property is vacated during the financial year then tax will be deducted in the last month of tenancy.

When to file Form 26QC?

The tenant can file Form 26QC within 30 days from:

  1. The end of the financial year or
  2. The day on which the property is vacated/ rent agreement terminated.

Let’s understand this with the help of an example:

Ram is paying a rent of INR 75000 per month. He will deduct TDS at the rate of 5% on the whole amount in the month of March. The total TDS amount will be INR 45,000 (INR 9,00,000*5%). Now, this TDS amount should be deposited along with Form 26QC within 30 days from the end of the financial year i.e. before 30th April.

What details are required to file Form 26QC?

The following details are required to file Form 26QC:

How to file Form 26QC?

You can file the form in the following manner:

  1. Go to the TIN NSDL website,

    Go to Services> Select TDS on Rent of Property. TIN NSDL_Rent_on_property

  2. Click on the Online form for furnishing TDS on Rent of Property (Form 26QC)

    From the left-hand site list.TIN_NSDL_Select_Form26QC

  3. Select Form 26QC

    Select TDS on Rent of Property

  4. Fill the details in the form

    Details of Tenant, Landlord, Property, TDS, etc needs to be added.TIN_NSDL_fill_Form26QC

  5. Make a payment of TDS and save the acknowledgment

    Payment can be made either immediately or at a later date. An acknowledgment will be generated upon successful submission.

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TDS Certificate

If the tenant has deducted TDS on the rent of the property, then they are required to provide a certificate in Form 16C to the landlord within 15 days from the date of filing the form.

FAQs

Can I file Form 26QC after the due date?

Yes, It can be filed after the due date i.e., after 30 days from the end of the financial year. But it will attract a fee of Rs. 200 for every day to be paid by the tenant of the property.

What is the difference between Form 26QB and 26QC?

Form 26QB is a challan-cum statement for TDS on the sale of the property. While Form 26QC is a statement for TDS on the rent of the property.

Which form is to be filed if the landlord is a Non-resident of India?

If the landlord of the property is Non-resident, then Form 27Q needs to be filed by the tenant irrespective of any rent payment. Form 27Q needs to be filed quarterly and not annually.

What if I forgot to save the acknowledgment number generated in Form 26QC?

The acknowledgment number can be retrieved in the following ways:
1. From TIN NSDL by entering the PAN of the tenant and landlord, Total amount, and Financial year.
2. From TRACES.

Got Questions? Ask Away!

  1. Hey @HarshitShah

    Yes, in case you have not deposited TDS by the due date, the following penalties might be applicable:

    • Interest (if you do not deposit the TDS amount in time)

    • Late filing fee (if you do not file by the deadline)

    • Penalty (if TDS is not filed within one year of the due date)

    Hope this helps!

  2. Hey @HarishMehta

    Form 24, 27 and 27E are forms to file TDS/TCS returns:

    • Form 24 is to file TDS return detailing Salary Payments

    • Form 27 is to file TDS return detailing Foreign or NRI payment other than salary

    • Form 27E is to file TCS returns

    Hope this helps!

  3. Hi @KrishnaAgarwal

  4. Hey @taxpayer, you can file your Income-tax return can claim the tax refund for any excess tax credits available to you.
    If your total taxable income is below the basic exemption limit then you won’t have any tax payable.
    You can check the total tax credits available to you in your Form 26AS

  5. Hello @abhaykk90,

    As per section 194IB of the income tax act, if you’re liable to deduct TDS on rent paid, the rate applicable will be 5%.

    Hope this helps!

  6. Hi @t_bovee,

    Here are answers to your various questions

    1. TDS has to be deducted every month at 5%.
    2. Deducted TDS has to be deposited within 30 days from the end of the month in which TDS is deducted.
    3. Penalty of 1.5% per month or part thereof will be levied in case of a late deposit of TDS.

    However, you can file TDS return 26QC within 30 days from the end of the financial year.

    Here’s a read on What is Form 26QC? Who needs to file form 26QC? - Learn by Quicko for your reference. Hope this helps.

  7. Hi @t_bovee

    It would not be possible for us to tell you the mismatch of amounts, without seeing the documents.
    However, for expert assistance with your taxes, here’s how you can Book a MEET.

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