New Delhi, Sept. 5 -- Tenants paying more than Rs.50,000 in monthly rent must deduct TDS before making the payment to their landlords as failing to comply with this rule can lead to penalty and other such consequences.

TDS data helps the government track high-value rental transactions and collect tax directly at the source. It is the tenant's responsibility to deduct the amount and deposit it with the government.

This provision falls under Section 194-IB of the Income-tax Act and applies to individuals and Hindu Undivided Families (HUFs) who are not not required to get their accounts audited. This means even salaried taxpayers, who may have no business income, fall under its scope.

If the rent paid to a resident landlord exceeds Rs.50,...