Government Proposes Increase in TDS Limit on Rent from ₹2.4 Lakh to ₹6 Lakh Annually, Easing Burden on Small Landlords.

TDS on Rent Increased

If you are a landlord, here’s some important news for you. The government has proposed to raise the tax deduction limit on rental income from Rs 2.4 lakh per annum to Rs 6 lakh.

Announcement in the Budget

Finance Minister Nirmala Sitharaman made this announcement while presenting the budget for the Financial Year 2025-26. She mentioned that the aim is to rationalize TDS by reducing the rates and making them more uniform. This increase in the tax deduction limit is intended to provide better clarity for taxpayers.

Details of the Increase

The current limit of Rs 2.4 lakh will be increased to Rs 6 lakh per year for TDS on rent. This change is expected to reduce the number of transactions that require TDS, particularly benefiting taxpayers who receive smaller rental payments. According to the Income Tax Act, residents must deduct TDS when rental income exceeds Rs 2.4 lakh in a financial year.

Monthly Rent Proposal

Additionally, the budget proposes a new monthly limit of Rs 50,000 for tax deductions on rent. This applies to individual taxpayers and undivided Hindu families. If you rent out property or machinery for more than Rs 50,000 in a month, TDS will need to be deducted.

Benefits for Small Taxpayers

Industry experts have stated that this annual TDS limit increase will significantly benefit small taxpayers and landlords, easing their financial burden.