Payment of TDS by an individual and filing 26QC

An individual pays rent of an amount exceeding Rs.50000/- on a monthly basis. As per section 194IB, he is required to deduct tax.
Query is,
1.whether tax is required to be deducted and deposited on a monthly basis (and also file 26QC) as the rent is paid every month?
2.Or required to be deducted and deposited at the end of the FY or last month of the agreement during the year whichever is earlier?
3.Or required to be deducted on monthly basis but deposit only after end of the FY/last month of the agreement during the year?
The provision in the section is very ambiguous.
As per my understanding, the tax is required to be deducted on credit or payment whichever is earlier basis and also to be deposited within 30 days along with 26QC.
Experts are requested to interpret the section.
Replies (2)
Quick Summary
Under Section 194IB, an individual paying rent exceeding Rs. 50,000 per month must deduct TDS @5%. TDS is not deducted monthly but once in a financial year or at the end of tenancy, whichever is earlier. Payment is made using Form 26QC and certificate issued via Form 16C.

194 IB: An Individual or HUF is paying rent of more than Rs. 50,000 per month – such person would also be required to deduct TDS @ 5% under Section 194IB. 

Tenants must deduct and pay the tax to the government once per financial year i.e Tenant needs to deduct TDS on March month rent or on the last tenancy month. A challan-cum-statement, Form 26QC, should be used to make this payment. Further, the tenant must provide Form 16C, a TDS certificate, to the landlord as proof of the tax deposited. A tax deduction account number (TAN) is not necessary to make the transaction.

Section 194IB applies specifically to individuals and HUFs paying rent above Rs 50,000 per month and not subject to tax audit. So yes, this applies to you even though you are not a business.

Here is how it works:

Rate: 5% TDS on total rent paid in the financial year (or rent paid at end of tenancy if leaving before March 31).

No TAN required: You do not need a Tax Deduction Account Number to file under Section 194IB. Your PAN is sufficient.

Form 26QC: This is the challan-cum-statement you file instead of a regular TDS return. It is a one-time filing at the end of the financial year (or when tenancy ends), not monthly.

Step-by-step for 26QC:
- Go to the Income Tax portal (www.incometax.gov.in).
- Pay the TDS amount using Challan 26QC under the TDS section.
- After payment, an acknowledgment and Form 16C (TDS certificate) are generated, which you give to the landlord.

Deduct 5% of the annual rent from the last month's payment (common practice). The landlord can claim this TDS as credit against their income tax liability.

This [Section 194IB and 26QC guide](https://taxgarden.in/blog/tds-on-rent-section-194i-194ib-india-ay-2026-27) covers the entire process with the 26QC payment steps and the landlord certificate process.

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