BooksIQTDS is deducted at 10% on rent for land, buildings, or furniture and at 2% on rent for plant, machinery, or equipment, once the aggregate rent paid to a single payee in the financial year exceeds ₹2,40,000.
Key points
- The deductor is any person liable to tax audit, along with the government, any company, firm, or trust paying rent.
- The rate is 10% for land, building, furniture, and fittings, and 2% for plant, machinery, and equipment, with the no-PAN rate stepping up to 20%.
- The threshold of ₹2,40,000 now applies on a full-year aggregate basis to a single payee — Finance Act 2025 changed this from the earlier single-payment trigger, effective FY 2025-26.
- The deduction is made at the earlier of credit or actual payment.
- Note that §194-IB — a separate provision for non-audit individuals and HUFs — deducts at 5% on rent above ₹50,000 per month.
Reference: §194I, ITA 1961 — under ITA 2025 (FY 26-27 onwards), this is §393(1) Sl.2
This page is general information for Indian businesses, current as of the
financial year shown above — not legal or tax advice. Tax law changes,
and how a provision applies depends on your specific facts. Confirm the
current position with a qualified professional before you act.
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