Rental income is taxable
Rental income in India is taxed under "Income from House Property" in your annual income tax return.
- You are entitled to a standard 30% deduction on net annual rental income for repairs and maintenance — regardless of whether you actually spent that money.
- You can also deduct property taxes paid and, if you have a home loan on the property, the interest paid on that loan.
TDS rules, updated from FY 2025-26
| Tenant type | Rule |
|---|---|
| Individual / HUF paying > ₹50,000/month | Must deduct 2% TDS under Section 194IB |
| Company / entity, annual rent > ₹6 lakh (updated Budget 2025 threshold) | Deducts 10% TDS under Section 194I |
| No PAN provided to tenant | Tenant must deduct TDS at 20% under Section 206AA |
The tenant deposits this with the government and must provide you Form 16A.
Important
Always give your PAN to the tenant, or they are required to deduct TDS at the much higher 20% rate.
Keep your PAN linked and documents organised
The government increasingly cross-references rental income declarations with bank deposits and property records. Landlords who receive rent in cash and do not declare it take on growing risk as digital payment trails become more common.
- Ask your tenant to pay rent via bank transfer or UPI. This creates a clean, auditable record for both of you.
- Issue a rent receipt each month. It protects both sides.
- Provide your PAN number to the tenant when signing the agreement. It's required for the stamp duty calculation.
Note
Consult a CA before your first income tax return after you begin renting. The first year is the most important to get right.