The indian government made significant changes to the home rental laws in 2025 so that both landlords and tenants would gain equal.
Reviving the rental market and lowering taxes are the primary goals. According to the Union Budget for 2025–2026, Finance minister Nirmala Sitharaman declared that the threshold for exemption from TDS on property rent will be raised from Rs 2.4 lakh to Rs 6 lakh.
TDS will thus not be deducted from rent up to Rs 6 lakh per year (Rs 50,000 per month). The 10% TDS that was deducted from rent exceeding Rs 20,000 paid each month caused cash flow problems for landlords. The new limitation will help landlords in the mid-income category since it would spare them from having to cope with the lengthy TDS deduction and refund processes.
Rental Income Tax Change From April
As of april 2025, rental income will be regarded as income from dwelling property. Section 28 of the Income Tax Act will be changed as a result. This change aims to make the tax process more transparent while also incentivizing taxpayers to submit their income that is subject to taxation. This might help the property owners better anticipate their tax and income responsibilities.
The Model Tenancy Law
The rights and responsibilities of the landlord and the tenant are delineated in the Center's proposed Model Tenancy Law. The legislation requires the landlord to provide the renter with written notice three months before raising the rent. Additionally, the rent authority must be notified of the landlord-tenant agreement within sixty days, after which it will be posted on the web. Rent increases, evictions, and other pertinent issues would be handled transparently and promptly as a result.
New Changes To Balance Rental Market
All things considered, these adjustments represent a major stride in organizing and balancing the rental market in India. While the tenancy law's provisions will assist to lessen conflicts, the TDS limit rise will make it simpler for landlords to manage their cash flow. Furthermore, more government money might result from tax transparency.
Reviving the rental market and lowering taxes are the primary goals. According to the Union Budget for 2025–2026, Finance minister Nirmala Sitharaman declared that the threshold for exemption from TDS on property rent will be raised from Rs 2.4 lakh to Rs 6 lakh.
TDS will thus not be deducted from rent up to Rs 6 lakh per year (Rs 50,000 per month). The 10% TDS that was deducted from rent exceeding Rs 20,000 paid each month caused cash flow problems for landlords. The new limitation will help landlords in the mid-income category since it would spare them from having to cope with the lengthy TDS deduction and refund processes.
Rental Income Tax Change From April
As of april 2025, rental income will be regarded as income from dwelling property. Section 28 of the Income Tax Act will be changed as a result. This change aims to make the tax process more transparent while also incentivizing taxpayers to submit their income that is subject to taxation. This might help the property owners better anticipate their tax and income responsibilities.
The Model Tenancy Law
The rights and responsibilities of the landlord and the tenant are delineated in the Center's proposed Model Tenancy Law. The legislation requires the landlord to provide the renter with written notice three months before raising the rent. Additionally, the rent authority must be notified of the landlord-tenant agreement within sixty days, after which it will be posted on the web. Rent increases, evictions, and other pertinent issues would be handled transparently and promptly as a result.
New Changes To Balance Rental Market
All things considered, these adjustments represent a major stride in organizing and balancing the rental market in India. While the tenancy law's provisions will assist to lessen conflicts, the TDS limit rise will make it simpler for landlords to manage their cash flow. Furthermore, more government money might result from tax transparency.
click and follow Indiaherald WhatsApp channel