Huge changes in the home rent laws have been effected by the Government of India in 2025 which are expected to prove advantageous to both landlords and tenants. Economizing the rental market, making it more transparent and easy in tax assessment are the new rules. These reforms will result in relaxation of the tax burden for both landlords and tenants. Let us discuss these new rules in detail.
Increase In TDS Limit
The limit of TDS on rent has been raised from ₹ 2.4 lakh to ₹ 6 lakh by Finance Minister Nirmala Sitharaman under the Union Budget 2025-26. Now, no TDS will be imposed on rent of up to ₹ 6 lakh in a year (₹ 50,000 monthly). Thus, this change will really benefit the middle-income group landlords, as TDS deduction and claiming refund need not be complex for them now.
Implementation Of Model Tenancy Law
It describes the rights and responsibilities of landlord and tenant. According to this, the requirement is that a written notice of three months must be given prior to increase in rent. Also, the landlord and tenant must notify their agreement to the Rent Authority within 60-days. This move will ensure transparency in all rent increase, eviction and related matters.
Improvement In Tax Process
From April 2025, rental income will be treated as income of housing property. For this, section 28 of the Income Tax Act has been amended. This change makes a clear premise for this tax process and encourages the taxpayer to disclose his income. It will help landlords in better planning for their income and tax liability.
Impact On Rental Market
These Home Rent Rules 2025 will balance the rental market and bring discipline in it. The increased TDS limit will ease the burden from the shoulders of landlords, to help them easily manage their cash flows, while the provisions under the tenancy law will help reduce disputes. Also, transparency in the tax procedure can increase the revenue earned by the Government.
Future Prospects
The Home Rent Rules 2025 are thus a very significant step for organizing and balancing the rental market in India. These changes are certainly going on to ensure better relations of landlords with tenants and also to give a new direction to the rental market.
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