The rental housing market in India is changing significantly in 2025. The intention of the new Home Rent Rules is to establish a fair, transparent and balanced tenancy and landlord system. These are to be reformed with the aim of minimizing disagreements, controlling rent increase and streamlining agreements.
Standardized Rental Agreements
Since 2025, the rental contracts should have a form within which all the contracts are structured according to the government. This consists of straight forward terms of rent, security deposit, maintenance and notice terms. Contracts are required to be registered on-line within 60 days, which makes them lawful and minimizes fraud.
Cap on Security Deposits
Now landlords are allowed to demand up to 2 months of rent as a security deposit. This regulation is a relief to tenants and allows them to move cheaperly.
Controlled Rent Increases
Increase in rent is possible once in a year. The hike needs a 90 day notice in writing by the landlords. The percentage growth should be in tandem with inflation and must be reasonable so that the tenants are not hit by a sudden financial shock.
Faster Dispute Resolution
Special rental courts are established and disputes are solved in a short period. These are the courts that are meant to resolve cases such as evictions, damages, and deposit matters within 60 days and provide a quicker form of justice and tranquility.
Digital Payment Mandate
Any rent amounting to more than 5,000 is to be completed online. This guarantees transparency, assists in filling in taxes and securing the two sides with a clear payment history.
Taxation and Income Clarity
Income that comes as a result of renting a property is now considered to be under the income tax act Section 28, as income of housing property. The TDS exemption threshold has increased to 6 lakh as opposed to 2.4 lakh per year to allow landlords to have a more effective cash flow management.
Summary of Key Changes
| Rule | Previous Status | 2025 Update | Impact |
|---|---|---|---|
| Rental Agreement Format | Informal, varied | Standardized and online registered | Legal clarity and fraud protection |
| Security Deposit Limit | Often 3–6 months’ rent | Capped at 2 months’ rent | Easier for tenants to relocate |
| Rent Increase Notice | Often sudden | 90-day written notice required | Predictable and fair rent hikes |
| Dispute Resolution | Lengthy legal process | Dedicated rental courts (60 days) | Faster resolution of conflicts |
| Digital Payments | Optional | Mandatory above ₹5,000 | Transparent financial records |
| TDS on Rent Income | ₹2.4 lakh annual limit | ₹6 lakh annual limit | Better cash flow for landlords |
Final Thoughts
The Home Rent Rules 2025 mark a major step toward a more organized rental ecosystem. The tenants now have clear guidelines and protection enabling them to work with confidence and security with the landlords.
Also read: Cheque Bounce Rules 2025: Repeat Offenders Face Account Freeze & Non-Bailable Charges