Finance Minister Nirmala Sitharaman presented the country's budget on Saturday, bringing good news for those paying house rent. The government has proposed to increase the income limit for house rent from ₹2.4 lakh per year to ₹6 lakh per year. Nirmala Sitharaman revealed that the TDS (Tax Deducted at Source) limit on rent will be raised for the financial year 2025-26. This increase will benefit taxpayers who pay lower rent. Currently, under Section 194-I of the Income Tax Act, rental income up to ₹2.4 lakh per year is exempt from tax. However, in the 2025-26 budget, it is proposed to increase this limit to ₹50,000 per month (₹6 lakh annually). This new provision will apply to individual taxpayers or Hindu Undivided Families (HUFs).

Good news for those paying house rent... Nirmala Sitharaman
Deloitte India's partner, Arthi Rawat, explained that TDS exemption will apply if the rent exceeds ₹50,000. CREDAI-MCHI Chairman Dominic Romel stated that raising the annual TDS limit on rent to ₹6 lakh will benefit small taxpayers. He further added that this move would increase the trend of renting second homes and promote investments in real estate. This decision will encourage people to purchase more flats, leading to growth in investments in the real estate sector. The 2025-26 budget proposal to increase the TDS limit on rental income will boost the real estate market, which could benefit both taxpayers and investors.

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