New TDS Rules for Rental Income (FY 2024-25).

TDS on Rental Income – New Rules (Effective April 1, 2025)

1. Section 194-I (For Businesses and Audited Individuals/HUFs)
• Threshold Limit: Increased from ₹2.4 lakh to ₹6 lakh per annum (₹50,000 per month)
• TDS Rates:
• 10% for rent of land, building, or furniture
• 2% for rent of plant, machinery, or equipment
• Applicability: Entities and individuals/HUFs under tax audit

2. Section 194-IB (For Non-Audited Individuals/HUFs)
• Threshold: Monthly rent exceeding ₹50,000
• TDS Rate: Reduced from 5% to 2% (effective from October 1, 2024)
• Compliance:
• Deduct TDS at payment or credit, whichever is earlier
• Deposit using Form 26QC within 30 days
• Issue Form 16C within 15 days from filing 26QC

3. Section 195 (For NRI Landlords)
• TDS Rate: 30% + surcharge and cess
• Note: Lower rates may apply under DTAA (Double Taxation Avoidance Agreements)

These changes aim to ease compliance and reduce the burden on tenants and landlords.