TDS on Rent from 1 April 2026: Rates, Threshold & Section 393
Rent TDS continues under Section 393 from 1 April 2026. Understand the ₹50,000 monthly threshold, 2% and 10% rates, and the separate Individual/HUF Form 141 route.
From 1 April 2026, rent TDS governed by the Income-tax Act, 2025 is reported through Section 393. The familiar rent categories continue, but accountants must use the new-law reference and forms.
Common rent threshold
For the regular business rent category, the threshold is generally ₹50,000 per month.
This replaced the older annual-threshold style and makes monthly vendor review important.
Common rates
- 2% for rent of plant and machinery.
- 10% for rent of land, building, furniture or fittings.
Mixed arrangements should be reviewed carefully rather than applying one rate to the entire contract without understanding its components.
Special Individual/HUF rent category
Specified Individuals/HUFs who are not otherwise required to deduct under the regular rent provision can fall under a separate rent TDS category where monthly rent exceeds the statutory threshold.
From Tax Year 2026-27, this PAN-based transaction is reported through Form 141 Schedule A.
Common mistakes
- Applying 10% to plant and machinery rent automatically.
- Ignoring security deposits that are actually adjustable against rent.
- Missing year-end rent provisions.
- Using old Section 194I/194IB codes for transactions governed by the new Act.
- Confusing GST on rent with the TDS base.
Rent TDS should be reviewed from the agreement, asset type, payer category and credit/payment timing—not just from the ledger name.