In her Union Budget 2024 speech on July 23, 2024, Finance Minister Nirmala Sitharaman announced significant changes to the Income Tax Payment Rules. Under the new rules, starting April 1, 2025, property owners will no longer classify their rental income as business income. Instead, it will fall under the Income from Housing Property category.
With these changes, the allowable deductions for repairs and maintenance will be reduced, leading to an increase in taxable income for landlords. The revised tax rules will limit deductions, allowing a standard deduction of up to 30% solely for maintenance and repair costs.
The amendments, set to take effect from April 1, 2025, will be implemented under Section 28 of the Income Tax Act. Property owners earning significant rental income will need to explore other strategies to save tax on rental income and manage their taxable income efficiently.
Also Read: How To Save Tax On Rental Income
