Further easing tax administration, Sitharaman announced an extension of the time limit for filing updated returns. Further easing tax administration, Sitharaman announced an extension of the time limit for filing updated returns. Further easing tax administration, Sitharaman announced an extension of the time limit for filing updated returns. As Finance Minister Nirmala Sitharaman rose to present the Union Budget 2025, she unveiled a set of tax reforms poised to reshape how individuals and businesses handle deductions and collections. Central to her announcement were sweeping changes to the Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) framework, aimed at easing compliance, enhancing liquidity, and simplifying tax obligations for millions of taxpayers.
The revisions, from rental income relief to updated return timelines, reflect the government’s broader agenda of financial empowerment and ease of living, particularly for the middle class.
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In a significant shift, the annual TDS limit on rent has been raised from ₹2.40 lakh to ₹6 lakh. This move reduces the compliance burden on tenants and landlords while increasing liquidity, especially benefiting the rental housing market in metropolitan cities.
The budget also introduced a notable change for homeowners. Taxpayers can now claim Nil valuation for two self-occupied properties instead of just one. This eliminates the tax on notional rental income from a second home, making residential real estate investments more attractive.
Adhil Shetty, CEO of Bankbazaar.com, said, “In a significant move, Finance Minister Nirmala Sitharaman relaxed the conditions for tax relief on self-occupied properties in the 2025 Union Budget. Taxpayers can now claim tax benefits for two self-occupied houses, a major change from the previous rule that allowed relief for only one property. This reform significantly eases the tax burden for individuals who own and live in multiple properties, offering financial flexibility and promoting homeownership. By acknowledging the diverse housing needs of families, this decision not only provides greater tax relief but also encourages real estate investment. The move aligns with the government’s broader focus on financial empowerment and ease of living, strengthening the middle class while simplifying the tax structure.”
“This step minimizes tax pressures, promotes homeownership, and facilitates real estate investment, especially in second homes and Tier 2 and 3 cities. Middle-class homebuyers, landlords, and investors can now benefit from reduced tax liabilities, better affordability, and less compliance hassles. By simplifying financial constraints and tax rules, the budget has made property ownership and rental housing more accessible. This gives a significant fillip to the real estate sector, specifically to and housing demand,” said Anuj Puri, Chairman, ANAROCK Group.
Further easing tax administration, Sitharaman announced an extension of the time limit for filing updated returns. Taxpayers will now have up to four years, an increase from the previous two-year window, to correct or update their returns for any assessment year.
In addition, the TCS exemption threshold under the Liberalised Remittance Scheme (LRS) has been raised from ₹7 lakh to ₹10 lakh. This adjustment provides greater flexibility for individuals making foreign remittances, reflecting the government’s intent to adapt to evolving financial behaviors.