Rent over ₹50,000? Tenants must know this crucial TDS rule!

• Tenants paying over ₹50,000 monthly rent must deduct TDS under Section 194-IB of the Income Tax Act, 1961.
• This rule applies to individuals and HUFs not subject to tax audit under Section 44AB, introduced in 2017 for better tax compliance.
• Union Budget 2024 reduced the TDS rate from 5% to 2% (effective Oct 1, 2024) for landlords with PAN, easing tenant burden.
• TDS must be deducted at the last month's rent or tenancy, deposited via Form 26QC within 30 days, and Form 16C issued to the landlord.
• Failure to deduct or deposit TDS incurs penalties: 1% interest for non-deduction, 1.5% for delayed payment, and up to ₹1 lakh fine.