If your monthly rent is ₹50,000, paying the rent alone will no longer be enough; you'll also have to fulfill a new tax-related responsibility. Let's learn more about this new change...

New rules for those paying rent more than Rs 50,000...

Rent Above 50,000 TDS Rules: If your monthly rent is ₹50,000, simply paying the rent will no longer be sufficient; you'll also have to fulfill a new tax-related responsibility. According to the rules, which will come into effect in 2026, the tenant will be responsible for deducting TDS under Section 194-IB.

This means that this responsibility will no longer fall on the landlord, but on the tenants. Let's learn more about this new change...

This change in the rules

If your monthly rent exceeds ₹50,000, you'll now be required to pay a 2% TDS on the total rent for the entire year. This amount is typically deposited in one lump sum at the end of the year, usually in March.

For example, if you pay ₹75,000 in rent each month, that translates to ₹9 lakh per year. At 2%, the TDS on this amount is ₹18,000. Paying this much money, along with the rent, all at once may seem daunting. Prepare yourself with this in mind to avoid further difficulties.

Ignoring TDS rules can be costly.

It's best not to take this rule lightly, as if TDS isn't deducted on time, the responsibility will fall on the tenant. In this case, the Income Tax Department may impose additional penalties and interest on you. Therefore, it's crucial to complete this process on time.

After the deduction in March, it must be submitted within 30 days, i.e., by April 30th. It is also necessary to fill out Form 26QC. After this, the landlord must submit Form 16C to ensure that the entire process is completed correctly.

Salaried people may face problems.

A major problem for many working individuals is having to adjust the entire year's TDS all at once. This can create a sudden financial strain. It's also important to discuss this matter with your landlord in advance to avoid any hassles.