If you’re paying rent for a flat in Mumbai, you need to know this: TDS on rent in Mumbai is now mandatory if your monthly rent exceeds ₹50,000. Yes, even if you’re not a business or company.
Let’s simplify this rule, so you don’t fall into legal trouble without even knowing it.
🧾 What Is TDS on Rent?
TDS stands for Tax Deducted at Source. Under Section 194-IB of the Income Tax Act, individuals or HUFs paying rent of more than ₹50,000 per month must deduct 5% TDS from the rent and deposit it with the government.
So, if your rent is ₹60,000:
- You pay ₹57,000 to your landlord.
- You pay ₹3,000 to the Income Tax Department.
👥 Who Should Deduct TDS?
- Any individual tenant or HUF paying over ₹50,000/month as rent.
- You don’t need a TAN. Your PAN and your landlord’s PAN are enough.
- This applies even if you’re a salaried employee or freelancer.
📅 When and How to File It
TDS on rent in Mumbai must be paid once a year, either:
- At the end of the financial year, or
- At the end of the rental agreement, whichever comes first.
To file:
- Submit Form 26QC online.
- Deposit the 5% TDS amount using internet banking.
- Provide your landlord with Form 16C—proof of deduction.
⚠️ Mistakes to Avoid
Many tenants either forget or don’t know they have to do this. Here’s what to avoid:
- Not deducting TDS when it’s required.
- Missing PAN details—this will lead to a 20% deduction instead of 5%.
- Delays in filing—this can attract interest and penalties.
These errors can lead to notices from the Income Tax Department. So, stay alert and act on time.
📍 Why It Matters in Mumbai
Mumbai has some of the highest rental rates in India. With most 2 BHK flats above the ₹50,000/month mark in areas like Bandra, Lower Parel, and Powai, this rule affects thousands of tenants across the city.
Still, many tenants are unaware of this law, which can cause compliance issues.
✅ Quick Checklist
- Rent above ₹50,000/month? → Deduct TDS
- No TAN required → Use PAN
- File Form 26QC once a year
- Give landlord Form 16C
- Don’t delay or skip—it’s a legal duty
Looking for verified, rental homes, resale inventory and trusted builders in Mumbai or Thane? Visit OneStopRealty for expert help, legal checks, and tenant-friendly support.
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