Budget 2025: Relief for homeowners as no tax on second self-occupied house

IANS February 2, 2025 218 views

The 2025 Union Budget has brought exciting news for homeowners with significant tax relief. Finance Minister Nirmala Sitharaman announced that taxpayers can now claim nil valuation on two self-occupied properties, expanding previous limitations. Additionally, the government has increased the Tax Deduction at Source (TDS) threshold on rent from Rs 2.4 lakh to Rs 6 lakh. These changes aim to provide more financial flexibility and support to small taxpayers and property owners.

"I propose to rationalise TDS by reducing the number of rates and thresholds" - Nirmala Sitharaman
Budget 2025: Relief for homeowners as no tax on second self-occupied house
New Delhi, Feb 2: The Union Budget 2025 presented brought good news for homeowners, as Finance Minister Nirmala Sitharaman announced new tax benefits.

Key Points

1

Nil valuation now allowed for two self-occupied houses

2

TDS threshold on rent increased from Rs 2.4 to Rs 6 lakh

3

Monthly TDS rental limit raised to Rs 50,000

Under the proposed changes, homeowners will now be able to claim a nil valuation for two self-occupied houses instead of just one, as was previously allowed.

The Budget suggests amending Section 23, sub-section (2) of the Income-tax Act which allows the annual value of a house or part of it to be considered as nil if the owner occupies it for personal residence or is unable to do so for any reason.

"Presently taxpayers can claim the annual value of self-occupied properties as nil only on the fulfillment of certain conditions," Finance Minister Sitharaman said during a Budget presentation in Parliament.

She also added that considering the difficulties faced by taxpayers, it is proposed to allow the benefit of two such self-occupied properties without any condition.

In addition, the government has proposed raising the annual threshold for Tax Deduction at Source (TDS) on rent from Rs 2.4 lakh to Rs 6 lakh.

This increase will benefit small taxpayers and landlords by reducing the number of transactions liable for TDS.

The monthly TDS limit on rent has been increased from Rs 24,000 to 50,000, which amounts to Rs 6 lakh annually.

"I propose to rationalise TDS by reducing the number of rates and thresholds above which TDS is deducted," FM Sitharaman said in her Budget speech.

The Finance Minister added that further, threshold amounts for tax deduction will be increased for better clarity and uniformity.

According to the Finance Minister, this change will provide relief to small taxpayers receiving modest rental payments.

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