Jointly-owned property: Is TDS applicable if total rent exceeds Rs 50,000?

TDS on rent

• No TDS if each co-owner's rent share is under Rs 50,000
• Tax deduction depends on rent paid to each owner, not total rent
• Rent split should match ownership share to avoid tax issues

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When a rented property is jointly owned, tenants often face confusion over whether TDS applies if the combined rent crosses the Rs 50,000 threshold. Here’s how income tax rules treat rent payments made separately to co-owners and when TDS deduction becomes necessary.

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I own a residential flat in Bengaluru jointly with my wife. We have let out this flat for monthly rent of Rs 52000.  We both receive Rs 26, 000 each in our bank account. Should the tenant deduct TDS @2 percent of the total rent in the month of March of 2026 as the total rent together is more than the threshold of Rs. 50000?

Expert's Advice: Section 194IB casts a duty on all the individuals and HUF to deduct tax @ 2 percent during the month of March from the rent paid to a resident if the rent for a month or part of the month exceeds Rs 50,000. In case the tenancy expires during the year, the tax has to be deducted in the last month of the tenancy.

The requirement to deduct the tax is qua each recipient of the rent and not qua the property. Since the rent payable to each of the owner of the property is below the threshold of Rs 50,000 the tenant is not required to deduct tax at source.

As far as splitting of the rent between you and your wife is concerned I presume that you both own the house property in the same ratio.  The beneficial ownership of an asset is dependent on the amount contributed by each of the joint owner. Just adding one person as joint owner in an asset does not make him or her beneficial owner of the property entitled to receive the income in his name. The income should strictly be split in the ratio in which you both have contributed to the cost of the property to avoid any income tax issue.

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