The Statutory Brief

IT Act 1961 → 2025 / Section 194-I

TDS

Section 194-I → Section 393

TDS on rent paid by businesses (and by individuals/HUFs, old 194-IB)

Section 194-I of the old Income-tax Act, 1961 · new section 393 under the Income-tax Act, 2025

New reference Section 393(1), Table Sl. No. 2(ii); exclusion in 393(4), Sl. No. 2

Income-tax Act, 1961Section 194-I

  • 194-I: 2% for plant/machinery/equipment, 10% for land, building, furniture
  • Threshold ₹50,000 for a month or part of a month (from 1 April 2025)
  • 194-IB: individuals/HUFs not under audit deduct 2% on rent above ₹50,000 a month
  • No TDS on rent paid to a REIT for its own real estate assets

Applies to FY 2025-26 (AY 2026-27) and earlier years.

Income-tax Act, 2025Section 393(1), Table Sl. No. 2(ii); exclusion in 393(4), Sl. No. 2

  • Specified persons: section 393(1), Table Sl. No. 2(ii): 2% / 10%
  • Others (old 194-IB): Table Sl. No. 2(i): 2%, deducted for the last month of the year or tenancy
  • Threshold ₹50,000 for a month or part of a month in both
  • REIT exclusion in 393(4), Table Sl. No. 2

Applies from tax year 2026-27 (from 1 April 2026).

What changed

Both rent provisions now sit in one table entry with two limbs. Rates and thresholds unchanged.

Practice notes

  • The CBDT mapping lists 194-IB under 393(3), Sl. No. 2(ii); the enacted table carries it in 393(1), Sl. No. 2(i). Check the TDS return utility for the code to use.
  • Persons deducting under Sl. No. 2(i) need not obtain a TAN (section 397(1)(c)).

These are summaries, not the statutory text. Read the bare Act for both sections on the Income Tax Department's official site, which also has a side-by-side comparison utility.

Frequently asked

What is the TDS rate on rent under the new Income Tax Act 2025?

For specified persons: 2% on plant, machinery or equipment and 10% on land, building or furniture; others (old 194-IB) deduct 2%. TDS applies where rent exceeds ₹50,000 for a month or part of a month.

What is section 194-I called in the new Income-tax Act, 2025?

Section 194-I of the Income-tax Act, 1961 corresponds to Section 393(1), Table Sl. No. 2(ii); exclusion in 393(4), Sl. No. 2 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 194-I under the new Income Tax Act?

Both rent provisions now sit in one table entry with two limbs. Rates and thresholds unchanged.

Is section 194-I still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 194-I of the 1961 Act. Section 393(1), Table Sl. No. 2(ii); exclusion in 393(4), Sl. No. 2 of the 2025 Act applies from tax year 2026-27.

Related sections

194H→393TDS on commission or brokerage (other than insurance commission)194C→393TDS on payments to contractors and sub-contractors24→22Deductions from income from house property: 30% standard deduction and home-loan interest