NEW DELHI: The authorities has proposed rising the annual threshold for Tax Deduction at Source (TDS) on rent from the present Rs 2.4 lakh to Rs 6 lakh, Finance Minister Nirmala Sitharaman introduced in her Budget 2025 speech on Saturday.
“I propose to rationalise Tax Deduction at Source (TDS) by reducing the number of rates and thresholds above which TDS is deducted.Further, threshold amounts for tax deduction will be increased for better clarity and uniformity,” Sitharaman stated.
She additional acknowledged, “The annual limit of Rs 2.40 lakh for TDS on rent is being increased to Rs 6 lakh.” The transfer goals to scale back the variety of transactions topic to TDS, offering reduction to small taxpayers receiving smaller rental funds.
As per the Budget doc, Section 194-I of the Income Tax Act mandates that entities, excluding people and Hindu Undivided Families (HUFs), should deduct TDS on rental revenue paid to residents if it exceeds the desired restrict. With the revision, tax deduction will now be required solely when rental funds exceed Rs 50,000 monthly.
The proposed change is anticipated to simplify compliance and scale back the tax burden on small-scale landlords whereas sustaining tax effectivity.
