TDS on Banquet Hall: 2% (194C) or 10% Rent (194I), 2026

Updated October 2026: new section numbers and the rent threshold

Two changes matter for every corporate booking in 2026:

1
The Income-tax Act 2025 replaced the 1961 Act from 1 April 2026. TDS on contracts and on rent now sits in one place, Section 393(1), with the old sections mapped to rows of its table. The rates and thresholds were carried over, so a hall-plus-food package is still 2% and hall-only rent is still 10%. Accountants still say "194C" and "194I", so this guide uses both.
2
Rent TDS now starts above ₹50,000 a month. Since 1 April 2025 the client deducts TDS on rent only when the rent it pays you is more than ₹50,000 for a month or part of a month. The old test was ₹2.4 lakh a year. A one-day hall booking of ₹40,000 therefore has no rent TDS.

Contract TDS (hall plus food) still applies when a single bill is above ₹30,000 or the client's payments to you pass ₹1 lakh in the year. The TDS certificate a client gives you, Form 16A, is replaced by Form 131 from tax year 2026-27.

What	Income Tax Act 1961 (payments before 1 Apr 2026)	Income-tax Act 2025 (from 1 Apr 2026)	Rate
Hall plus food package (contract)	Section 194C	Section 393(1), Table Sl. 6(i)	2% (1% individual or HUF)
Hall-only rent (land and building)	Section 194I(b)	Section 393(1), Table Sl. 2(ii)	10%, above ₹50,000 a month
Rent of equipment (plant or machinery)	Section 194I(a)	Section 393(1), Table Sl. 2	2%, above ₹50,000 a month
TDS certificate to the venue	Form 16A	Form 131	Quarterly

The Statutory Legal Distinction: Section 194-I vs Section 194-C

Understanding the statutory Income Tax provisions for corporate event billing:

1Section 194-C — Bundled Banquet Hall Booking with Catering (2.0% TDS):

Statutory Authority: CBDT Circular No. 05/2002 dated 30-07-2002.

Applicability: When the venue provides the air-conditioned hall, furniture, audio-visual setups, and in-house food catering under a single composite contract.

TDS Rate: Strictly 2.0% TDS on the taxable invoice value (or 1.0% for individual/HUF corporate entities).

Rationale: The provision of food and event amenities makes the contract a 'contract for work' rather than a passive lease of immovable property.

2Section 194-I — Pure Commercial Real Estate Space Rental Only (10.0% TDS):

Applicability: When the venue leases out only the physical hall/lawn space to a corporate client who hires an independent outside caterer.

TDS Rate: 10.0% TDS on Rent (Section 194-I(b) for land and building), only when the rent paid by that client is more than ₹50,000 for the month (since 1 April 2025).

TDS Deduction Comparison Matrix across Corporate Booking Formats

The table below outlines TDS sections, rates, applicable SAC codes, and statutory documentation requirements across corporate event formats:

Corporate Booking Format	Applicable SAC Code	Statutory TDS Section	Mandatory TDS Rate	Statutory Tax Document
Bundled Corporate AGM + Catering (500 PAX)	SAC 996331	Section 194-C	2.0% TDS (Company)	Form 16A / Form 131 (quarterly)
Pure Space Rental Only (Outside Catering)	SAC 997212	Section 194-I	10.0% TDS (Rent)	Form 16A / Form 131 (quarterly)
Day Delegate Corporate Training (DDR)	SAC 996331	Section 194-C	2.0% TDS (Company)	Form 16A / Form 131 (quarterly)
Preferred Vendor Stage Decorator Bill	SAC 998596	Section 194-C	2.0% TDS (Company) / 1% (Prop)	Form 16A / Form 131 (quarterly)
Preferred Vendor Commission Referral	SAC 9985 group	Section 194-H	2.0% TDS (Finance Act 2024)	Form 16A / Form 131 (quarterly)

Worked Corporate Invoice Example: ₹5.0 Lakh Corporate Conference

The calculation below details a compliant corporate invoice for a turnkey conference at a hotel that qualifies as specified premises (room value above ₹7,500 in the preceding year, or declared), under SAC 996331 at 18% with Section 194-C TDS withholding:

Main Ballroom Rental & Audio-Visual Setup: ₹1,50,000.00

Executive Lunch Buffet & High-Tea (300 PAX @ ₹1,000): ₹3,00,000.00

Laser Projection & Podium Microphones: ₹50,000.00

Total Taxable Supply Value: ₹5,00,000.00

Central GST (CGST @ 9.0%): ₹45,000.00

State GST (SGST @ 9.0%): ₹45,000.00

Gross Invoice Total: ₹5,90,000.00

Less TDS Deducted by Corporate under Section 194-C (2.0% on ₹5,00,000 Taxable): -₹10,000.00

Net Payment Due from Corporate Client: ₹5,80,000.00

(Note: For non-specified independent venues, bundled catering is billed at 5% GST [2.5% CGST + 2.5% SGST = ₹25,000 tax], while Section 194-C 2% TDS remains unchanged on the taxable base value).

Reconciling Form 26AS / AIS and Form 16A with Venura OS

Venura streamlines corporate tax compliance:

Automated TDS Deduction Tracking: Automatically flags whether corporate clients deducted 2% (194-C) or 10% (194-I), logging the tax credit in customer ledgers.
Form 26AS Matching: Reconciles quarterly Form 16A certificates against TRACES portal ledgers, preventing uncredited tax disputes.
One-Click Tally Prime Sync: Exports corporate sales journals and TDS receivable ledgers directly into Tally Prime.

Handling Mandatory E-Invoicing & IRN Generation for Corporate Invoices

For venue enterprises with annual aggregate turnover exceeding ₹5 Crores:

1
Mandatory B2B E-Invoicing: Corporate event invoices must be uploaded to the Invoice Registration Portal (IRP) to generate an Invoice Reference Number (IRN) and statutory signed QR code.

2
Automated IRN Generation in Venura: Generates IRNs via authorized GST Suvidha Providers in real time, embedding government QR codes directly onto output PDFs.

3
Input Tax Credit Guarantee: Validates corporate client GSTIN checksums to ensure zero tax credit discrepancies in GSTR-2B.

Vendor Master File & Form 16A TDS Certificate Audits

Ensuring corporate statutory compliance across all corporate clients:

1
Corporate Master File Review: Verify active 15-digit GSTINs, corporate TAN details, and billing addresses for all regular corporate clients.

2
Quarterly Form 16A TDS Reconciliation: Reconcile 2% Section 194-C TDS deductions against central TRACES portal ledgers, preventing tax filing penalties.

One-Click Tally Prime Sync for Corporate Invoices

Streamlining corporate event accounting workflows:

Automated Sales & Purchase Ledgers: Export client tax invoices, vendor expense ledgers, and CGST/SGST splits directly into Tally Prime XML ledgers in under 60 seconds, eliminating manual data entry.

Frequently asked questions

What is the TDS rate on banquet hall booking for corporate events in India?

When a banquet hall provides a composite package of hall rental and food catering under SAC 996331, TDS is deducted at 2.0% under Section 194-C (Contract for Catering) in accordance with CBDT Circular No. 05/2002. If pure space is rented without food, 10% TDS applies under Section 194-I, but only when the rent is more than ₹50,000 for the month. For payments from 1 April 2026 both are covered by Section 393(1) of the Income-tax Act 2025, at the same rates.

What does CBDT Circular No. 05/2002 state regarding banquet hall TDS?

CBDT Circular No. 05/2002 clarifies that where a hotel or banquet hall enters into an agreement with a client to provide facilities including meals/catering for a conference or event, the contract is a contract for catering/work and attracts TDS under Section 194-C, not Section 194-I.

Is TDS calculated on the GST component of the banquet invoice?

No. Under CBDT Circular No. 23/2017, TDS under the Income Tax Act is deducted strictly on the taxable value of services, excluding the GST component, provided the GST is indicated separately on the tax invoice.

How does venue management software track corporate TDS deductions?

Venura OS automatically calculates Section 194-C (2%) or 194-I (10%) TDS deductions on corporate invoices, manages Form 16A certificate reconciliation, and syncs directly with Tally Prime.

This article is general information, not tax or legal advice. Rules and rates change, so confirm with your chartered accountant or the official notification before you bill.

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TDS on Banquet Hall: 2% (194C) or 10% Rent (194I), 2026

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