Updated for Income-tax Act, 2025 | Tax Year 2026-27

TDS on Commercial Property Rent: Section 393 Compliance

Paying rent for an office, shop, warehouse, or showroom? From 1 April 2026, TDS on rent is covered by Section 393(1), which replaced Section 194I. Rent of buildings attracts 10% TDS under payment code 1009, and machinery rent attracts 2% under code 1008. We handle the TDS computation, challan, quarterly return, and certificate so your landlord gets full credit.

10% building rent | 2% machinery rent
Form 140 and Form 131 filing
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TDS on commercial property rent - Section 393 compliance

Fee for TDS on Commercial Property Rent Compliance

One simple fee covers the TDS computation, challan, quarterly return, and certificate for your landlord. The TDS amount itself is paid separately to the government. Individual and HUF tenants not under audit use Form 141 and Form 132, so message us on WhatsApp to confirm your case.

TDS on Rent | Form 140 | Form 131

₹1000 / certificate

TDS computation at 10% or 2%
Challan with payment code 1009 or 1008
Quarterly TDS return (Form 140)
TDS Certificate (Form 131)

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10%Building rent

2%Machinery rent

₹50,000Monthly rent threshold

Quick Answer: TDS on Commercial Property Rent Under Section 393

Under Section 393(1), Table Sl. No. 2(ii) of the Income-tax Act, 2025, which replaced Section 194I, a tenant deducts 10% TDS on rent of land, building, or furniture (payment code 1009) and 2% on rent of plant, machinery, or equipment (code 1008) when rent to a landlord crosses ₹50,000 per month. TDS is deposited by the 7th of the next month, reported in Form 140, and certified by Form 131.

Section 194I vs Section 393: What Changed for Rent TDS

The rates stayed the same. The section reference, payment codes, and forms changed from 1 April 2026.

Particulars	Earlier (Income-tax Act, 1961)	Now (Income-tax Act, 2025)
Business tenant	Section 194I	Section 393(1), Table Sl. No. 2(ii)
Individual or HUF tenant, not under audit	Section 194-IB	Section 393(1), Table Sl. No. 2(i)
Building, land, furniture rent	10%, challan code 4IB	10%, payment code 1009
Machinery, plant, equipment rent	2%, challan code 4IA	2%, payment code 1008
Quarterly statement and certificate	Form 26Q and Form 16A	Form 140 and Form 131
Individual or HUF challan and certificate	Form 26QC and Form 16C	Form 141 and Form 132
Threshold	₹2.4 lakh a year (raised to ₹6 lakh from FY 2025-26)	₹50,000 per month or part of a month

Transition note: Rent paid or credited up to 31 March 2026 follows Section 194I of the 1961 Act. Rent on or after 1 April 2026 follows Section 393.

TDS Rates and Payment Codes on Commercial Rent

Type of Rent	Rate	Payment Code	Applies To
Land, building, furniture, or fittings	10%	1009	Office, shop, warehouse, showroom, factory building
Plant, machinery, or equipment	2%	1008	Rented machines and equipment
Rent by individual or HUF not under audit	2%	Form 141 route	Individual tenants of commercial property
Landlord without valid PAN	Generally 20%	As applicable	Any rent payment

Tip: Always confirm the code on the live challan or TRACES screen before paying, because code lists can be updated.

Who Must Deduct TDS on Commercial Rent?

Business tenants (Form 140 route)

Companies, firms, LLPs, and trusts renting an office or shop
Individuals and HUFs whose accounts are subject to tax audit
Government bodies and local authorities
Any tenant paying rent to a resident landlord above the threshold

Individual and HUF tenants (Form 141 route)

Individuals and HUFs not subject to tax audit
Rent above ₹50,000 per month for a month or part of a month
2% TDS, deducted once for the year or at the end of the tenancy
No TAN needed, filed with PAN, certificate in Form 132

What Counts as Rent for TDS Purposes

Commercial Premises

Offices, shops, showrooms, warehouses, godowns, and factory buildings taken on rent or lease.

Land and Furniture

Rent of vacant land, parking land, furniture, and fittings used with the premises.

Machinery and Equipment

Rent for plant, machinery, and equipment, taxed at the lower 2% rate.

Advance and Other Charges

Advance rent and non-refundable deposits can attract TDS, so check each payment before you pay.

Examples of TDS on Commercial Rent

Case	Rent	Code	TDS
Company renting an office	₹80,000 per month	1009	10% = ₹8,000 per month
Firm renting a warehouse	₹55,000 per month	1009	10% = ₹5,500 per month
Company renting machinery	₹60,000 per month	1008	2% = ₹1,200 per month
Individual (no audit) renting a shop	₹70,000 per month	Form 141	2% on yearly rent of ₹8.4 lakh = ₹16,800 once
Any tenant, rent below the limit	₹40,000 per month	None	No TDS

How to Deduct and Deposit TDS on Commercial Rent

Check who the tenant is
A company, firm, LLP, or any person whose accounts are audited deducts under the business rent provision. An individual or HUF not under audit follows the separate rule and files Form 141.
Check the landlord's PAN and the rent threshold
Collect the landlord's PAN and check that rent to the same landlord is above the threshold of ₹50,000 per month, about ₹6 lakh a year.
Deduct TDS at the right rate
Deduct 10% on rent of land, building, or furniture, and 2% on rent of plant, machinery, or equipment. Where GST is shown separately, TDS is generally deducted on the rent without GST.
Deposit with payment code 1009 or 1008
Pay the TDS online by the 7th of the next month using code 1009 for building rent or code 1008 for machinery rent.
Report the deduction in Form 140
File the quarterly statement in Form 140 by 31 July, 31 October, 31 January, and 31 May, with the landlord's PAN and challan details.
Issue Form 131 to the landlord
After Form 140 is processed, download Form 131 from TRACES and issue it to the landlord within 15 days from the due date of the statement.

Due Dates for Rent TDS Deposit, Form 140 and Form 131

Quarter	Period	Form 140 Due	Form 131 Due
Q1	April to June	31 July	15 August
Q2	July to September	31 October	15 November
Q3	October to December	31 January	15 February
Q4	January to March	31 May	15 June

Business tenants generally deposit TDS by the 7th of the following month. Example: TDS on October 2026 rent is deposited by 7 November 2026, reported in the Q3 Form 140 due 31 January 2027, and certified by Form 131 by 15 February 2027. Individual and HUF tenants pay within 30 days from the end of the month of deduction and issue Form 132 within 15 days from the Form 141 due date.

Interest, Late Fee and Other Consequences

Default	Consequence
TDS not deducted on time	Interest at 1% per month or part of a month
TDS deducted but not deposited on time	Interest at 1.5% per month or part of a month
Late filing of Form 140	Late fee of ₹200 per day, capped at the TDS amount
TDS not deducted or deposited on rent	A part of the rent expense may be disallowed in your income tax computation

GST and Income Tax Points for Landlords and Tenants

Commercial rent is generally a taxable service under GST, so landlords whose rent crosses the turnover limit need to register for GST online. Ask the landlord to show GST separately on the invoice, because TDS is then generally deducted on the rent without GST. Landlords also report rent income in their return and claim the TDS credit using Form 131 and Form 26AS. See our ITR-2 filing guide for property and salary income and ITR-3 return filing for landlords with business income.

Not Sure Which TDS Rule Applies to Your Rent?

Chat with our tax expert on WhatsApp. Share the tenant type, landlord PAN, and rent amount and we will confirm the right code, rate, and filing route.

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Frequently Asked Questions on TDS on Commercial Rent

Is TDS applicable on commercial property rent?

Yes. Businesses and other tenants who are required to deduct must deduct TDS on rent paid to a resident landlord for an office, shop, warehouse, showroom, or factory building when the rent crosses the threshold.

Which section applies to TDS on rent under the Income-tax Act, 2025?

Rent paid by companies, firms, and audited persons falls under Section 393(1), Table Sl. No. 2(ii), which replaced Section 194I. Rent paid by an individual or HUF not under audit falls under Table Sl. No. 2(i), which replaced Section 194-IB.

What is the TDS rate on commercial property rent?

The rate is 10% on rent of land, building, furniture, or fittings and 2% on rent of plant, machinery, or equipment. Individuals and HUFs not under audit deduct 2%.

What is the threshold limit for TDS on rent?

TDS applies when rent to the same landlord exceeds ₹50,000 per month or part of a month, which is about ₹6 lakh in a year. This was raised from the earlier limit of ₹2.4 lakh per year.

What are the payment codes for TDS on rent?

Code 1009 is used for rent of land, building, or furniture at 10%, and code 1008 is used for rent of plant, machinery, or equipment at 2%. Individual and HUF tenants not under audit file through Form 141 instead.

Which forms are used for TDS on commercial rent?

Business tenants report rent TDS in Form 140, the quarterly statement for non-salary payments, and issue Form 131 to the landlord. Individual and HUF tenants not under audit use Form 141 and issue Form 132.

Is TDS deducted on the GST amount in rent?

Where GST is shown separately in the rent invoice, TDS is generally deducted on the rent excluding GST. If GST is not shown separately, TDS applies on the full amount.

What is the due date to deposit TDS on rent?

Business tenants generally deposit TDS by the 7th of the following month and file Form 140 each quarter. Individual and HUF tenants under the separate rule pay within 30 days from the end of the month in which TDS is deducted.

What if the landlord does not give a PAN?

TDS is deducted at a higher rate, generally 20%, instead of 10% or 2%. Collect a valid PAN from the landlord before the first rent payment.

What is the penalty for not deducting TDS on rent?

Interest applies at 1% per month for late deduction and 1.5% per month for late deposit, and a late fee of ₹200 per day applies for late filing of the statement, capped at the TDS amount. A part of the rent expense may also be disallowed in your income tax computation.

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