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 the Income Tax Portal. This section is being introduced to cover the high rental income group within the preview of tax.
Who needs to file Form 26QC?
The property tenant who is making rent payments to the resident landlord needs to file this form. 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:
- The end of the financial year i.e. April 30 or
- 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 a rate of 5% of the total amount in 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:
- PAN of the tenant as well as of the landlord
- Address of the tenant and landlord
- Period of tenancy
- Total value of rent payable
- Value of rent paid in last month
- Date of payment/credit
- Total amount paid/credited
- Date of tax deduction
How to file Form 26QC?
You can file the form in the following manner:
- Navigate to the Income Tax website
Go to E-File> Select “+ New Payment” > 26 QC (TDS on Rent of Property).
- Enter the required Details
Enter the required details of the Tenant, Landlord and Property rented.
- Enter Tax Deposit Details
Enter the TDS amount and interest and late filing fee in case of delay in payment. The TDS amount cannot be more than the last month’s rent.
- Make the Payment
Submit the challan cum statement and deposit the amount.
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. This form can be downloaded from the TRACES Website.
Late Filing Fee and Interest
If you file Form 26QC late, you will face the following penalties:
- You must pay 1% interest per month for delaying tax deductions. If you deduct the tax but fail to deposit it, the interest increases to 1.5% per month.
- You will be charged a late fee of ₹200 per day for filing Form 26QC after the due date. If you delay issuing Form 16C, you must pay a penalty of ₹100 per day.
FAQs
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.
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.
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.
Hi Madam,
It seems like the TIN-NSDL website can no longer be used for filing form 26QC. It asks to use the incometaxindia.gov.in site. Can you please check and help?
Hi @Chirag_Hota
You may follow these steps to File Form 26QC from Income Tax Portal
a. Add Tenant Details
b. Add Landlord Details
c. Add Property Rented Details
d. Add Payment Details
Hope it helps.
Hi @Ankit_Jain
Here’s attaching a screenshot for your reference,
You can check, there is an option 26 QC (TDS on Rent of Property), then, click Proceed to move further.
Hope it helps.
These are the steps
Hi @Muskan_Balar ,
If rent is paid on monthly basis, do I need to file TDS on rent once a year (towards end of financial year) or do I need to file TDS on rent on monthly basis ?
Thanks
Hi @ujjwalc
If you’re a tenant of the property, who is making rent payments to the resident landlord need to deduct TDS once in a financial year, which is the last month of the financial year.
You’re required to file Form 26QC within 30 days from
Here’s more you can read about Form 26QC: TDS on Rent of Property - Learn by Quicko.
Hi @Kuruba_Dinesh
Form 16 is a TDS certificate on salary. It is issued by employers to their employees at the end of FY.
As you mentioned you have paid the TDS amount u/s 194IB, which is for TDS deduction on rent paid by individuals. So in that regard, you are required to download Form 16A.
Form 16A is different from Form 16. Form 16A is for TDS on income other than salary.
Here are the Steps to Download Form 16A from TRACES Portal - Learn by Quicko.
Hope this helps.
Hello @Sweta_Mehta
TDS at 5% is to be deducted for rent payment made and Form 26 QC is to be filed once a year. Since your agreement is over, you have to file the return.
The incorrect amount reflecting in Form 26AS of the landlord is something a user specific issue and we need to verify the return filed by you to help you further.
We have a team of tax experts who can review the return filed by you and help you to file a corrected return if needed to reflect the correct amount in Form 26AS of landlord. You can book a slot using the below link with one of our tax experts:
Book a MEET
Thank you.
I have 55000 rent from Oct-1, 2024.
I know i have to pay 2% TDS for the 6 months of FY24-25 which comes to 6600.
Question is can i deduct this amount in February rent and fill the 26QC in feb itself so that i can submit the same in my HR?
2nd when i go to epay tax section and then 26qc section the address under tenant details is directly taken from my AAdhar details. Do i need to change it to current address where i live on rent or it does not matter?
@Muskan_Balar - In tenant information which is first point the address is getting fetched directly from aadhar. Do i need to change it to the address where i live on rent or is it just for information filling purpose?
Or the property details as you mentioned is in point C so i can let my address be as it is from Aadhar.