With an aim to establish a well balanced, transparent and efficient rental market, the Government of India brought extensive changes to the home rent regulations in 2025. These new regulations favour tenants and the landlords because of the standardization of the agreement, rent increases and taxation are simplified.
Mandatory Written Agreements
With the new regulations, every rental Agreement has to be written. And in the case of tenancies above 11 months the tenancy should be registered within a period of 60 days in the local rent authority. This will make it legally binding and limit the number of spats over the terms, time and obligations.
Capped Rent Increases
In order to alleviate the unexpected financial burden that may face the tenant, it has become imperative that annual rental increments should not exceed 5 or unless stated otherwise in the contract. Also, the landlord has to give three month of prior notice to make any increase. This rule facilitates stability as well as predictability in the rent prices.
Security Deposit Limits
Security deposits have also been harmonized and capped at two months rent advances. As an example, when the monthly rent is 20,000 rupees, the deposit should not be greater than the expenses of 40,000 rupees. This shift will also ease up the one-time financial pressure on the tenant and will also guarantee timely returns at the lease termination with the deduction of unpaid fee or damage.
Streamlined Eviction Process
There has been the making of eviction procedures more structured. Landlords have to present legislative grounds and due procedure involving having to go to court where necessary. This guards the tenants against unfair or random eviction, and makes them solve disputes in courts.
Transparent Rent Pricing
The rent will now be anticipated to be proportional to the annual value of the property usually 8-10 percent. As an example, a land with a price of 50 lakh can fetch a rent of between 40,000 to 50,000 per month. The tenants can contest their excessive rents either in rent authority or courts of law.
Taxation and TDS Reforms
Since April of 2025, the rental income will be treated like house property income under Section 28 of the Income Tax Act. The exemption limit on TDS has been increased to 2.4 lakh to 6 lakh per year and helps landlords in flowing more cash and also simplifies tax practices.
Final Thoughts
The Home Rent Rules 2025 create a milestone in the need to systemize the India rental housing industry. These reform measures will ensure renting is safer and more transparent to all parties through fairer practice on rent, tougher protection on tenants and clarification of the tax regime.
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