Section 194-IB → Section 223
TDS on payment of rent by certain individuals or HUF
Quick Answer
Section 194-IB of the Income Tax Act, 1961 (TDS on payment of rent by certain individuals or HUF) corresponds to Section 223 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 194-IB
In the 1961 statute, Section 194-IB deals with TDS on payment of rent by certain individuals or HUF. TDS @ 5% by individuals/HUFs (not under audit) paying monthly rent exceeding Rs. 50,000.
From 1st April 2026, the same subject sits at Section 223 of the Income-tax Act, 2025 — retained and renumbered as Section 223 of the Income-tax Act, 2025. Retained. Rate reduced to 2% in recent updates to lower the compliance burden on high-rent tenants.
For Section 194-IB, the practical impact is rated Medium. Affects high-income salaried individuals living in premium rentals.
Sec 194-IB
Provision Summary
TDS @ 5% by individuals/HUFs (not under audit) paying monthly rent exceeding Rs. 50,000.
Sec 223
Provision Summary
Retained. Rate reduced to 2% in recent updates to lower the compliance burden on high-rent tenants.
Key Changes & Highlights
- Rate reduced from 5% to 2% to encourage transparency in the rental market.
Frequently Asked Questions
What is Section 194-IB of the Income Tax Act, 1961 about?
Section 194-IB of the Income Tax Act, 1961 covers TDS on payment of rent by certain individuals or HUF. TDS @ 5% by individuals/HUFs (not under audit) paying monthly rent exceeding Rs. 50,000.
Which section replaces Section 194-IB in the Income-tax Act, 2025?
Section 194-IB of the Income Tax Act, 1961 maps to Section 223 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. Rate reduced to 2% in recent updates to lower the compliance burden on high-rent tenants.
What is the impact of the change to Section 194-IB under the new tax code?
The transition impact for Section 194-IB is rated Medium. Affects high-income salaried individuals living in premium rentals.
What should I watch out for when Section 194-IB moves to the 2025 code?
Rate reduced from 5% to 2% to encourage transparency in the rental market. These points are specific to Section 194-IB (TDS on payment of rent by certain individuals or HUF).
Disclaimer: This mapping of Section 194-IB (TDS on payment of rent by certain individuals or HUF) to Section 223 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 194-IB is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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