Govt proposes hike in threshold for TDS on rent to ₹6 lakh from current ₹2.4 lakh annual limit
The Hindu
Finance Minister Nirmala Sitharaman proposes to simplify TDS by reducing rates, increasing thresholds, and raising rent limit to ₹6 lakh.
The government on Saturday (February 1, 2025) proposed to enhance annual threshold for deduction of tax at source (TDS) on rent to ₹6 lakh from the current limit of ₹2.4 lakh.
Also Read:Union Budget 2025 LIVE updates
"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," Finance Minister Nirmala Sitharaman said in her Budget speech.
She announced that the "annual limit of ₹2.40 lakh for TDS on rent is being increased to ₹6 lakh".
This will reduce the number of transactions liable to TDS, thus benefitting small taxpayers receiving small payments, the finance minister added.
According to the Budget document, Section 194-I of the Income Tax Act requires that any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any income by way of rent, should deduct income tax at the applicable rates, only when the amount of such rental income exceeds ₹2.4 lakh in a financial year.
"It is proposed to increase this threshold amount of income by way of rent for requirement of deduction of tax at source from ₹2.4 lakh in a financial year to ₹50,000 in a month or part of a month," it added.
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