Home Rent Rules 2025: In 2025, the Government of India introduces comprehensive changes in respect of house rent laws to benefit landlords and tenants alike. The main intent is to invigorate the rental market and ease taxation.
Increase in TDS Limit on Rent
Pursuant to the Union Budget of 2025-26, Finance Minister Nirmala Sitharaman has announced an increase in the limit on exemption from TDS on house rent from Rs 2.4 lakh to Rs 6 lakh. TDS will consequently not be deducted on rent up to Rs 6 lakh per annum (Rs 50,000 per month). TDS at 10% was deducted on rent above Rs 20,000 paid per month, with landlords facing cash flow problems out of the TDS amount that ought to have been paid. The relief under the new limit will be for the midsized income group landlords who would not have to go through the tedious TDS deduction and refund proceedings.
Changes In Taxation On Rental Income
From April 2025, rental income will be treated as income from housing property. Section 28 of the Income Tax Act will undergo an amendment for this purpose. This change aims to bring about transparency in the taxation process and additionally motivate the taxpayer to declare their income subject to tax. This would help the owners of the property in planning their income and their tax liability.
New Provisions Under The Model Tenancy Law
The Model Tenancy Law proposed by the Centre spells out the rights and responsibilities of the landlord and tenant. Under this law, the landlord has to provide the tenant with a written notice three months prior to raising rent. Furthermore, the agreement between the landlord and the tenant must be notified to the rent authority within 60 days, who shall upload it on the portal. This will ensure transparency and orderliness in the increase in rent, eviction, and related matters.
Potential Impact Of The New Rules
These changes are expected to ensure better relations between landlords and tenants. The increase in the TDS limit will allow landlords to have ease concerning cash flow while the provisions of the tenancy law would minimize disputes. Furthermore, transparency in taxation may lead to improved revenue for the government. Overall, these changes are a significant advancement toward organizing and balancing the rental market in India.
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