TDS on Rent: Paying Over Rs 50,000? Deduct Tax by March 31 or Face Penalties!

• Individuals or HUFs paying over Rs 50,000 monthly rent must deduct TDS under Section 194-IB of the Income Tax Act.
• TDS is deducted once a year, typically in March or the final month of tenancy, and must be deposited within 30 days.
• The TDS rate, revised in Union Budget 2024, is now 2% (effective Oct 1, 2024), reduced from the previous 5%.
• Failure to deduct or deposit TDS incurs penalties, including interest (1-1.5% per month), late fees, and fines up to Rs 1 lakh.
• Pay TDS via the Income Tax e-filing portal using Form 26QC and issue Form 16C to the landlord as proof of deduction.