The government has changed the TDS rule on rent of the house. It has been announced by Finance Minister Nirmala Sitharaman in the union budget. This will make it easier to people with senior citizens and rental income. The government has increased the limit of exemption from TDS on home rent from Rs 2.4 lakh to Rs 6 lakh annually. The Finance Minister said on 1 February that this will reduce the number of transactions under the purview of TDS. This will ease small taxpayers. Let us know how this announcement of the Finance Minister will benefit both the keen and the landlord.
Changes in the rule will have such an impact
Suppose you have a house, which you have given on rent. Its annual fare is more than Rs 2.4 lakh. So far your tenant on it Tds After cutting, you had a rule to rent. Now he will pay you without deducting TDS. This will increase the amount of rent in your hand. The reason for this is that the government has increased the limit of tDS exemption from Rs 2.4 lakh to Rs 6 lakh. This change in the rule will benefit both the tenant and the landlord.
Now TDS on more than 6 lakh fare
After the implementation of the new rule, if a tenant lives in a house whose annual fare 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 the tenant is the responsibility of cutting TDS on rent. TDS exemption limit was Rs 1.8 lakh till FY19. It is important to keep in mind that the tenant will have to deduct 10 % TDS on the rent amount. The rate of TDS will increase to 20 percent in case the landlord does not have a PAN.
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Both tenant and landlord benefit
Tax experts say that a large number of people will benefit from a change in TDS rule on rent in the union budget. The rent of homes has increased rapidly in the last few years. The tenant had to deduct TDS due to rent of more than Rs 20,000 every month. This used to increase the 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 in big cities like Delhi, Mumbai.