Section 393(1): TDS on Rent Above ₹50,000 - Complete Guide
Section 393(1) requires tenants to deduct 2% TDS when monthly rent exceeds ₹50,000. Filing steps, deadlines, and penalties.
If your monthly rent exceeds ₹50,000 and your landlord is an Indian resident, you are required to deduct 2% TDS under Section 393(1) of the Income Tax Act, 2025 (formerly Section 194-IB). No TAN needed, but the deadlines are strict and the penalties are real.
Who Does This Apply To?
You must deduct TDS under Section 393(1) if all three conditions are met:
- You are an individual or HUF tenant
- Your monthly rent exceeds ₹50,000
- Your landlord is a resident of India
If your landlord is an NRI, different rules apply. See our Section 393(2) guide.
Step-by-Step: How to File
- Deduct 2% from rent. If your rent is ₹60,000, deduct ₹1,200 as TDS and pay ₹58,800 to your landlord.
- Log in to incometax.gov.in with your PAN. No TAN is required for Section 393(1).
- File Form 141 (formerly Form 26QC) under e-Pay Tax. The TDS payment is integrated into the form; you file and pay in a single step.
- Download Form 132 (formerly Form 16C) from TRACES after filing. This is the TDS certificate your landlord needs for their tax return.
- Issue Form 132 to your landlord. This is their proof that TDS was deducted and deposited.
Deadlines
Form 141 must be filed within 30 days from the end of the month in which rent was paid.
| Rent Paid In | Form 141 Deadline | Form 132 Available |
|---|---|---|
| April 2026 | 30 May 2026 | After Form 141 is processed |
| May 2026 | 30 June 2026 | After Form 141 is processed |
| June 2026 | 30 July 2026 | After Form 141 is processed |
This is a monthly obligation. You must file Form 141 for every month you pay rent above ₹50,000.
What You Need to File
- Your PAN (tenant)
- Landlord's PAN
- Property address
- Monthly rent amount
- Date of payment
- Payment method (net banking, UPI, or debit card for the TDS amount)
Keep these details handy. The portal doesn't save partial entries.
Penalties for Non-Compliance
| Violation | Penalty |
|---|---|
| Failed to deduct TDS | Interest at 1% per month from date rent was paid |
| Deducted but deposited late | Interest at 1.5% per month from deduction date |
| Filed Form 141 late | ₹200 per day, capped at the TDS amount |
| Failed to deduct entirely | Penalty up to 100% of TDS amount under Section 448 (formerly Section 271C) |
On a ₹60,000 rent, the monthly TDS is just ₹1,200. But skip it for a year and the penalties can exceed ₹14,400, more than the TDS itself.
Common Mistakes
- Forgetting to file after deducting. Deducting ₹1,200 from rent is not enough. You must file Form 141 and pay the amount to the government. Many tenants deduct but never file.
- Paying full rent to an NRI landlord. If your landlord lives outside India, Section 393(1) does not apply. You need Section 393(2), which has a 31.2% rate and requires a TAN. Using 2% is a costly error.
- Not downloading Form 132. Your landlord needs this certificate. Without it, the TDS credit doesn't appear against their PAN. File Form 141, then go to TRACES to download Form 132 and share it.
If you use ZentedOut, the TDS obligation is auto-detected when you set up a tenancy. The correct section, rate, and deadlines are tracked from day one.
ZentedOut is a free rental portfolio manager: agreements, TDS compliance, rent tracking, and receipts.
Related: What changed under IT Act 2025 | Section 393(2) for NRI landlords | Which form do you need?
This article is for informational purposes only and does not constitute tax or legal advice. Consult a chartered accountant for guidance specific to your situation. Filing procedures and form numbers are based on the Income Tax Act, 2025 as of the date of publication and may change based on subsequent government notifications.