Increase in TDS threshold for rent of house property under section 194-I
Budget 2025 has increased the threshold limit to deduct TDS on house rent paid by non-individuals like companies, etc. Now TDS on house rent paid has to be deducted from the rent payment if the rent payment is Rs 50,000 per month or part of a month or more. Earlier this threshold was if the rent payment exceeded Rs 2.4 lakh per annum. This threshold limit was Rs 1,80,000 until FY 2018-19. This amendment will take effect from April 1, 2025.
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Budget 2025 increased the annual limit threshold for TDS deduction under section 194-I to Rs 6 lakh from Rs 2.4 lakh at present.
“It is proposed to substitute the first proviso to the said section so as to provide that no deduction of tax at source shall be made under this section where the income by way of rent credited or paid for a month or part of a month by the aforesaid person to the account of, or to, the payee, does not exceed fifty thousand rupees,” read Finance Bill 2025.
What is section 194-I?
According to the Income Tax Act, Section 194-I is:
“Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any income by way of rent, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any
