The New TDS Rules 2025 raise the rent limit to ₹6 lakh, revise TDS on commissions, mutual funds & technical services. Learn how these changes affect you.
New TDS Rules 2025: No TDS on Rent up to ₹6 Lakh Annually, Other Key Changes
The New TDS Rules 2025 introduced by the Modi government in the General Budget have brought significant relief to taxpayers. One of the biggest announcements is the increase in the rental income threshold for TDS (Tax Deducted at Source). The new rules raise the annual limit from ₹2.5 lakh to ₹6 lakh, but with a new monthly ceiling of ₹50,000. This update is important for landlords and tenants alike.
No TDS on Rent up to ₹6 Lakh Annually—But Mind the Monthly Limit
According to CA Vineet Rathi, many taxpayers misunderstand the New TDS Rules 2025. While it's true that rent up to ₹6 lakh annually will not attract TDS, there's a catch: if the monthly rent exceeds ₹50,000, TDS will still apply. This means that even if your total rent in a year is ₹6 lakh, but you earn more than ₹50,000 in a single month, TDS deduction becomes mandatory.
Consider a scenario where rent is received only for 10 months. If the total rent is ₹6 lakh, the monthly rent becomes ₹60,000. Since this exceeds the monthly threshold, TDS will be deducted despite staying within the annual limit. The New TDS Rules 2025 make it crucial to account for both monthly and annual figures, especially for those renting their properties seasonally or for part of the year.
Major Revisions in TDS Limits Across Sectors
Alongside rent-related changes, the New TDS Rules 2025 include increased limits for other forms of income. Here’s a quick breakdown of the revised thresholds:
- TDS on interest from securities: Limit raised to ₹10,000
- TDS on income from mutual funds and company shares: Raised to ₹10,000
- Insurance agents’ commission: Increased from ₹15,000 to ₹20,000
- Brokerage commissions: Limit now ₹20,000, up from ₹15,000
- Technical services: Threshold raised from ₹30,000 to ₹50,000
These changes are especially beneficial for investors, insurance agents, and professionals offering technical services. If you belong to any of these categories, the New TDS Rules 2025 could offer much-needed financial relief by avoiding premature deductions and easing compliance burdens.
Who Benefits the Most?
The New TDS Rules 2025 are designed to benefit a wide range of taxpayers:
- Landlords renting properties seasonally or for part of the year
- Insurance agents and brokers
- Investors in securities and mutual funds
- Freelancers and professionals offering technical services
With the increased thresholds, more people can now receive their income without the hassle of TDS deduction, provided they stay within the revised limits.
Conclusion
The New TDS Rules 2025 have streamlined tax deduction policies across multiple sectors. While the raised thresholds are a welcome change, taxpayers must pay close attention to monthly limits, especially in the case of rental income. Understanding the nuances of these changes is key to staying compliant and optimizing your income flow.
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New TDS Rules 2025 are expected to play a crucial role in simplifying the tax deduction process, improving cash flow for taxpayers, and enhancing transparency in the tax system.
