Section 194I - Rent - Income-tax Act, 1961

1 [Rent. 194-I. Any person, not being an individual or a Hindu undivided family, who is responsible for paying to 2 [a resident] any income by way of rent, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, 3 [deduct income-tax thereon at the rate of- 7 [(a) two per cent. for the use of any machinery or plant or equipment; and (b) ten per cent. for the use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings:]] 12 [Provided that no deduction shall be made under this section, where the income by way of rent credited or paid for a month or part of a month by such person to the account of, or to, the payee, does not exceed fifty thousand rupees: ] 5 [Provided further that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed 11 [ one crore rupees in case of business or fifty lakh rupees in case of profession ] during the financial year immediately preceding the financial year in which such income by way of rent is credited or paid, shall be liable to deduct income-tax under this section.] 9 [Provided also that no deduction shall be made under this section where the income by way of rent is credited or paid to a business trust, being a real estate investment trust, in respect of any real estate asset, referred to in clause (23FCA) of section 10, owned directly by such business trust.] Explanation. -For the purposes of this section,- 6 [ (i) rent means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of (either separately or together) any,- (a) land; or (b) building (including factory building); or (c) land appurtenant to a building (including factory building); or (d) machinery; or (e) plant; or (f) equipment; or (g) furniture; or (h) fittings, whether or not any or all of the above are owned by the payee; ] ( ii ) where any income is credited to any account, whether called Suspense account or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly.] ************** NOTES:- 1. Inserted by the Finance Act, 1994, w.e.f. 1-6-1994. 2. Substituted for any person by the Finance Act, 2003, w.e.f. 1-6-2003. 3. Substituted for deduct income-tax thereon at the rate of twenty per cent: by the Finance Act, 1995, w.e.f. 1-7-1995. 4. Clauses (a), (b) and (c) substituted for clauses (a) and (b) by the Finance Act, 2007, w.e.f. 1-6-2007. Prior to its substitution, clauses (a) and (b) read as under : (a) fifteen per cent if the payee is an individual or a Hindu undivided family; and (b) twenty per cent in other cases : 5. Inserted by the Finance Act, 2002, w.e.f. 1-6-2002. 6. Substituted by the Taxation Laws (Amendment) Act, 2006, w.e.f. 13-7-2006. Prior to its substitution, clause (i) read as under : (i) rent means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of any land or any building (including factory building), together with furniture, fittings and the land appurtenant thereto, whether or not such building is owned by the payee; 7. Substituted vide Finance (No.2) Act, 2009, w.e.f. 1-10-2009, before it was read as, 4 [ (a) ten per cent for the use of any machinery or plant or equipment; (b) fifteen per cent for the use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings where the payee is an individual or a Hindu undivided family; and (c) twenty per cent for the use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings where the payee is a person other than an individual or a Hindu undivided family: ] 8. Substituted vide Finance Act, 2010 w.e.f 1st day of July, 2010 before it was read as one hundred and twenty thousand rupees 9. Inserted vide THE FINANCE ACT, 2015 w.e.f. 1st day of June, 2015. 10. Substituted vide FINANCE ACT, 2019 w.e.f 01-04-2019 before it was read as 8 [one hundred eighty thousand rupees] 11. Substituted vide Finance Act, 2020 dated 27-03-2020 w.e.f. 01-04-2020 before it was read as the monetary limits specified under clause ( a ) or clause ( b ) of section 44AB 12. Substituted vide Section 64 of the Finance Act, 2025 dated 29-03-2025 w.e.f. 01-04-2025 before it was read as, Provided that no deduction shall be made under this section where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year by the aforesaid person to the account of, or to, the payee, does not exceed 10 [ two hundred and forty thousand rupees ] :