TDS · Section 194I · FY 2026–27
Section 194I: TDS on Rent
Section 194I (TDS on Rent): the TDS rate is 10% (land/building) / 2% (plant/machinery/equipment). Threshold: Rs. 50,000 per month (or part of a month) — a single month above Rs. 50,000 triggers TDS even if the year totals less than Rs. 6,00,000. Finance Act 2025, w.e.f. 1 April 2025 (earlier Rs. 2,40,000 per financial year).
Section 194I covers TDS on rent for land, buildings, plant, machinery, and equipment. For freelancers receiving rental income on co-working spaces they own or sublet, this section applies to the payer (typically a corporate tenant).
Rate source: Income Tax Department TDS rate chart
10%
10% (land/building) / 2% (plant/machinery/equipment)
Threshold
₹50K a month
Who deducts
Companies, LLPs, partnerships, audited individuals/HUFs paying rent.
No PAN
20%
Shows up in
Form 26AS & AIS, quarterly
What it looks like on a real payment
Worked exampleSec 194I
Amount payable to you₹3,00,000
TDS @ 10%− ₹30,000
You receive₹2,70,000
The ₹30,000 is not lost — it is pre-paid tax, credited in your 26AS and adjusted at filing.
Example assumes one month’s land/building rent of Rs. 3,00,000 — above the Rs. 50,000 monthly threshold. Plant/machinery rent attracts 2%. TDS is on the rent value EXCLUDING GST per CBDT Circular 23/2017 when GST is shown separately on the invoice (commercial rent attracts 18% GST; residential is exempt).
Run your own numbersFree 194I calculator — invoice amount in, deduction and take-home out. No signup.What this means for you
If rent is a side income and your total tax for the year is modest, the 194I TDS often comes back as a refund — reconcile it in 26AS before filing.
For a freelancer who owns or sublets a co-working space or commercial unit, the corporate tenant deducts TDS under 194I before paying rent — 10% on land/building, 2% on plant/machinery — but only for any month in which rent to you crosses Rs. 50,000 (Finance Act 2025, w.e.f. 1 April 2025; earlier Rs. 2,40,000 per year). TDS is computed on the rent EXCLUDING GST when GST is shown separately (CBDT Circular 23/2017). The deducted amount appears in your Form 26AS; claim it against your total tax at ITR.
Effective since: 1 April 2025 (Rs. 50,000/month threshold — Finance Act 2025).
When your client must deposit it — and report it
The client must deposit TDS by the 7th of the month after deduction (30 April for March). It reaches your 26AS only after they file the quarterly TDS statement (Form 26Q), due on these dates — which is why a deduction in March can be invisible until 31 May:
Form 26Q · quarterlyFY 2026–27
Q1 — Apr to Jun31 July
Q2 — Jul to Sep31 October
Q3 — Oct to Dec31 January
Q4 — Jan to Mar31 May
FAQ
What is the TDS rate under Section 194I?
Who deducts TDS under Section 194I?
What is the threshold for Section 194I TDS?
Is TDS under Section 194I deducted on the GST-inclusive amount?
How do I claim TDS deducted under Section 194I in my ITR?
Not sure how to claim this TDS back? Read the freelancer’s guide to TDS deducted by clients — how it lands in your 26AS and how you reclaim it in your ITR.
For the CA reading this
The deadline sheet you already send, with your name on it
Every statutory date for the month — GST returns, advance tax, and the dates your client's own customers owe them: when the TDS they withheld must reach the department, and when the certificate is due. Add your firm's name and forward it as it stands. No signup, no email, nothing to accept.
The image is the one that travels on WhatsApp. Dates are statutory, not advice — the sheet says which rows bind whom.
Sources
Rates as notified for FY 2026–27 and can change. General information, not tax advice. Verify with your CA before you file.
Related sections
Every deduction, tracked to the rupee
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