New TDS Rule: The government has implemented new Rent Rules 2025 to reduce the problems of tenants. With these new rules, living on rent is expected to become easier, cleaner and more organized for everyone. Now online registration of rent agreement will be required within 60 days and the limit of security deposit has also been fixed. If you are a tenant or a landlord. It is important to know about the new rules.
The new rules explain how tax will have to be paid if the rent exceeds a certain limit. That means, if you pay more than Rs 50,000 as rent every month, then just paying the rent is not enough. You will also have to follow tax rules. If you do not do this, you may have to face heavy fine, interest and legal problems.
TDS rules
According to Section 194-IB of the Income Tax Act, if any working person, professional or small business owner pays more than Rs 50,000 as rent every month, then he is required to deduct 2% TDS. This TDS is deducted once a year in March or in the month in which the tenancy ends.
According to the tax department, even if your business last year was less than Rs 1 crore or profession was less than Rs 50 lakh, you will still have to deduct tax on rent above Rs 50,000. After this the tenant has to fill Form 26QC and the landlord has to give Form 16C. Many people ignore it thinking that it is applicable only to companies and later they get late fee notices from the tax department.
Heavy penalty for breaking rules
There is also a provision for penalty for not following the new rules. Late fee of Rs 200 per day, 1% interest for not deducting TDS, 1.5% interest for not depositing TDS, fine ranging from Rs 10,000 to Rs 1 lakh and in serious cases one may have to go to jail for 3 months to 7 years.
Online registration mandatory
Now the rent agreement will not remain only on paper. It is necessary to register it online within 60 days of signing. With this, unwritten or arbitrary agreements will now end. Failure to register on time will attract a fine of up to Rs 5,000.
Control over fare increase
Now landlords will not be able to increase the rent suddenly. Written notice will have to be given 90 days before increasing the fare. Tenants will not be made to vacate the house suddenly. In big cities, tenants were often asked to vacate the house suddenly. Under the new rules, no one can be made to vacate the house without the order of the Rent Tribunal.
Rules for repair and home inspection
The landlord will have to be informed 24 hours before coming to the house for repair or inspection. Also, necessary repairs should be completed within 30 days. If not, the tenant can reduce the rent or adjust the money by doing the repairs himself. Along with this, rules have also been made to settle disputes. Issues regarding rent, deposit, wrongful eviction or damage will now be resolved within 60 days.
Benefits for tenants
- low security deposit
- control over rent increase
- clean digital paperwork
- quick settlement of disputes
Homeowners Benefits
- contract legally valid
- Digitization reduces disputes
- Clear payments and records