Union Budget 2025-26 (Full) + Finance Bill, 2025

Section 194-I – Rent

Section 194-I of the 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, shall deduct income-tax at the rates as specified therein, only when the amount of such rental income exceeds Rs. 2,40,000/- in a financial year.

2. It is proposed to increase this threshold amount of income by way of rent for requirement of deduction of tax at source under section from Rs. 2,40,000/- in a financial year to Rs. 50,000/- in a month or part of a month.

3. This amendment will take effect from the 1st day of April 2025.

[Clause 59]

 

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Full Text:

Union Budget 2025-26 (Full) + Finance Bill, 2025

TDS on rent threshold lowered, expanding deduction requirement to monthly rent payments effective next fiscal year. The amendment expands the requirement to deduct tax at source on rent by replacing the prior annual exemption with a monthly (or part-month) threshold for payers other than individuals and HUFs; rent exceeding the specified monthly amount will attract withholding, and the change is effective from the start of the next fiscal year.