Union Budget 2025: Higher TDS limit to Rs 6 lakh set to boost Bengaluru’s rental market

The Union Budget 2024 has increased the TDS threshold on rental income from Rs 2.4 lakh to Rs 6 lakh per annum, a move expected to revitalize the rental housing market. This change will significantly impact metros like Bengaluru, where rental rates often hover around the new threshold of Rs 50,000 per month.

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With the higher limit, many tenants will no longer need to deduct TDS from their rent payments. Landlords earning up to Rs 6 lakh annually will also benefit from reduced compliance requirements. This shift is expected to unlock thousands of idle rental homes, as landlords who were hesitant due to TDS obligations may now list their properties.

Bengaluru, known for its high property prices and strong investor interest, has a large inventory of vacant homes. Many investor-owners previously held onto properties, choosing to wait for price appreciation rather than renting them out due to low rental yields and tax deductions. Now, with the increased threshold, more properties may enter the rental market, boosting supply and stabilizing rents.

This revision is also expected to benefit retirees and seniors, many of whom depend on rental income to supplement their savings. The measure could further encourage homeownership with rental intent, leading to greater investment in rental housing, especially in the affordable segment.

Real estate experts believe this change is a step in the right direction but emphasize that more reforms are needed. The adoption of the Model Tenancy Act across states would further streamline rental agreements, providing a structured legal framework for landlords and tenants.

With demand for rental housing on the rise, Bengaluru’s rental market stands to benefit significantly from this policy shift, making it easier for both landlords and tenants to participate in the sector.