Understanding TDS on Rent: A Complete Guide for Landlords

By the rentalEase Team • July 2026

If you earn rental income in India above the threshold, your tenant is required to deduct tax at source (TDS) before paying you rent — currently 2% for plant and machinery and 10% for land, building and furniture under section 194-I for most landlords, with lower documentation-only compliance under section 194-IB for individuals and HUFs below the audit threshold paying above the monthly limit.

What this means in practice: the rent credited to you each month is net of TDS, and the tenant deposits that tax with the government against your PAN. You claim credit for it when filing your income tax return, visible in your Form 26AS and AIS. The most common failure is a mismatch — rent recorded gross in your books while the tenant deducted TDS — which creates notices and reconciliation pain.

The fix is process, not paperwork. Record every bill with the TDS component split out per service, track which months the tenant actually deposited (challan details), and reconcile quarterly against Form 26AS. An eTDS journal — a simple register of deposits linked to bills — turns a week of CA back-and-forth into a ten-minute review.

Quarterly discipline beats annual heroics. Reconcile TDS every quarter, chase missing challans within the same quarter, and keep tenant PAN records current. Your March self will thank you.