The new Rent Rules 2025 will make renting easier and safer. Online registration, notices for rent increases, repair regulations, and TDS on rents above ₹50,000 will now be mandatory.
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New TDS Rule: The government has implemented the New Rent Rules 2025 to ease the difficulties faced by tenants. These new rules are expected to make renting easier, cleaner, and more organized for everyone. Online registration of the rent agreement within 60 days will now be mandatory, and security deposit limits have also been set. Whether you are a tenant or a landlord, it’s important to know about the new rules.
The new rules specify how taxes must be paid if the rent exceeds a certain threshold. This means that if you pay more than ₹50,000 per month, simply paying the rent isn’t enough. You must also comply with tax regulations. Failure to do so could result in hefty penalties, interest, and legal trouble.
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TDS rules
According to Section 194-IB of the Income Tax Act, any person employed, professional, or small business owner who pays rent exceeding ₹50,000 per month must deduct a 2% TDS. This TDS is deducted once a year in March or the month in which the tenancy ends.
According to the tax department, if your business turnover last year was less than ₹1 crore or your profession less than ₹50 lakh, you still have to deduct tax on rent above ₹50,000. The tenant then needs to fill out Form 26QC and the landlord needs to provide Form 16C. Many people ignore this, thinking it applies only to companies, and later receive late fee notices from the tax department.
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Heavy penalties for breaking the rules
There are also penalties for not following the new rules. A late fee of ₹200 per day, 1% interest for not deducting TDS, 1.5% interest for not depositing TDS, a fine of ₹10,000 to ₹1 lakh, and in serious cases, imprisonment for 3 months to 7 years is also possible.
Online registration is mandatory
Rent agreements will no longer remain merely on paper. They must be registered online within 60 days of signing. This will eliminate unwritten or arbitrary agreements. Failure to register on time will result in a fine of up to ₹5,000.
Control over rent increases
Landlords will no longer be able to suddenly increase rents. A written notice must be given 90 days before any rent increase. Tenants cannot be suddenly evicted. In large cities, tenants have often been asked to vacate their homes unexpectedly. Under the new rules, no one can be evicted without an order from the Rent Tribunal.
Rules for repairs and home inspections
The landlord must notify the tenant 24 hours in advance of any repairs or inspections. Necessary repairs must be completed within 30 days. If not, the tenant can reduce the rent or adjust the amount by making the repairs themselves. Rules have also been established for resolving disputes. Matters related to rent, deposits, wrongful eviction, or damage will now be resolved within 60 days.
Benefits for tenants
- Low security deposit
- Control over rent increases
- Neat digital paperwork
- early resolution of disputes
Advantages for homeowners
- Contracts are legally sound
- Digitization reduces disputes
- Clear payments and records
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