The government has changed the rules of TDS on house rent. This was announced by Finance Minister Nirmala Sitharaman in the Union Budget . This will be very convenient for senior citizens and people with rental income.
The government has increased the limit of exemption from TDS on house rent from Rs 2.4 lakh per annum to Rs 6 lakh. The Finance Minister said on February 1 that this will reduce the number of transactions falling under the scope of TDS. This will be convenient for small taxpayers. Let us know how both the tenant and the landlord will benefit from this announcement of the Finance Minister.
This is how the rule change will affect
Suppose you have a house which you have given on rent. Its annual rent is more than Rs 2.4 lakh. Till now, the rule was that your tenant would pay you the rent after deducting TDS on it . Now he will pay you the rent without deducting TDS. This will increase the amount of rent you get. The reason for this is that the government has increased the limit of exemption from TDS on house rent from Rs 2.4 lakh to Rs 6 lakh. This change in the rule will benefit both the tenant and the house owner.
Now TDS on rent of more than 6 lakh rupees
After the implementation of the new rule, if a tenant lives in a house whose annual rent is more than Rs 6 lakh, then he will have to pay the rent to the landlord after deducting TDS. The reason for this is that it is the responsibility of the tenant to deduct TDS on rent. Till FY19, the limit of exemption from TDS on rent was Rs 1.8 lakh. It is important to keep in mind that the tenant will have to deduct 10 percent TDS on the rent amount. In case the landlord does not have a PAN, the rate of TDS will increase to 20 percent.
Benefits to both the tenant and the landlord
Tax experts say that the change in the rules of TDS on rent in the Union Budget will benefit a large number of people. House rents have increased rapidly in the last few years. Due to this, the tenant had to deduct TDS if the rent was more than Rs 20,000 every month. This increased compliance. Now there is no need to deduct TDS on rent up to Rs 50,000 every month. This will provide great relief to people living on rent in big cities like Delhi and Mumbai.
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