TDS Compliance for Telangana Businesses: Rent, Contractors and Property Purchases

TDS rules are national, but some situations come up far more often in Telangana because of the kind of economy it has: a large office rental market in Hyderabad, a construction boom, frequent property transactions, and many individuals paying high rents. This guide covers those.

Note: this article describes the rules under the Income-tax Act, 1961. The Income-tax Act, 2025 applies from 1 April 2026 (tax year 2026-27), with renumbered provisions and updated forms, so check the current position for later periods.

Office and Commercial Rent

Businesses paying rent for offices, warehouses or shops must deduct TDS once rent crosses the threshold for the year. In Hyderabad's commercial areas, this applies to almost every business with an office. Watch for:

• Different rates for land and buildings versus plant and machinery.
• Deducting TDS on the rent, not on the security deposit, unless it's adjusted against rent.
• Landlords' PANs, especially where property is jointly owned.

Construction and Contractors

Telangana's construction and infrastructure activity means many businesses pay contractors and sub-contractors. TDS applies once payments cross the threshold, at different rates for individuals and HUFs and for other contractors. Transporters who own a small number of vehicles and provide a PAN can be exempt, with a declaration.

Buying Property

Anyone buying immovable property other than agricultural land for ₹50 lakh or more must deduct TDS from the payment to the seller, and deposit it using a combined challan-cum-statement. This applies to individuals buying flats in Hyderabad as much as to businesses. The TDS is based on the higher of the consideration and the stamp duty value.

Individuals Paying High Rent

Individuals and HUFs who don't otherwise need a TAN must deduct TDS if they pay rent above ₹50,000 a month. Many tenants in Hyderabad's premium housing fall into this, and deposit TDS through a challan-cum-statement without needing a TAN.

Non-resident Landlords and Sellers

Many Hyderabad properties are owned by NRIs. Rent or purchase payments to non-residents need withholding under the rules for non-residents, often at much higher effective rates, and Form 15CA/15CB where applicable. This is one of the most common TDS errors in the city.

A Checklist for Telangana Businesses

1. Deduct TDS on office rent above the threshold.
2. Deduct TDS on contractor payments, and collect transporter declarations.
3. Deduct TDS on property purchases of ₹50 lakh or more.
4. Check whether landlords or sellers are NRIs before paying.
5. Deposit by the due date and file returns on time.

Getting Help

Think Filing handles TDS for Telangana businesses and individuals, including rent, contractors, property purchases and NRI payments.