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The government has introduced the New Rent Agreement 2025, a comprehensive framework aimed at simplifying the renting process and reducing disputes between landlords and tenants. With the number of people renting residential and commercial properties steadily rising, the authorities have brought in strict guidelines to ensure transparency, accountability, and smoother regulation. These new rules are based on the Model Tenancy Act (MTA) and recent budget provisions, giving the rental system a structured and modern approach.

Under the updated norms, tenants will find it easier to register their agreements, while landlords will not be allowed to evict tenants without issuing proper notice. Additionally, tenants will now be required to pay two months of advance rent for residential properties, whereas commercial tenants will follow separate security deposit rules. The framework aims to protect the rights of both parties and prevent misuse of the system.

Mandatory Registration Within Two Months

One of the biggest changes in the New Rent Agreement 2025 is the compulsory registration of rental agreements. Every rent agreement must be registered within two months of signing. This can be done either on the state’s online property registration portal or by visiting the nearest registrar’s office. Agreements that remain unregistered beyond the stipulated period may attract a penalty of Rs 5,000. This measure ensures legal accountability and reduces the chances of disputes arising due to informal arrangements.

Key Changes for Tenants

1. Mandatory Agreement Registration
   An unregistered rental agreement will no longer be considered valid. Tenants and landlords must ensure timely registration to avoid penalties and legal complications.

2. Security Deposit Limits
   To prevent exploitation, security deposits have been standardized:
   – For residential properties, tenants will pay a maximum of two months' rent as a deposit.
   – For commercial properties, the limit has been set at up to six months’ rent.

3. Regulated Rent Increase
   Landlords can no longer hike rent arbitrarily. Any increase must be communicated beforehand through proper notice, following the rules laid out in the Model Tenancy Act.

4. Protection from Sudden Eviction
   Tenants cannot be asked to vacate the premises without due legal process. The new rules clearly state that eviction without proper notice or procedure is prohibited.

5. Faster Dispute Resolution
   To ensure swift justice, special rent courts and tribunals have been established. These bodies aim to resolve rental disputes within 60 days, offering timely relief to both tenants and landlords.

Benefits for Landlords

1. Higher TDS Exemption
   The TDS threshold on rental income has been increased from Rs 2.4 lakh to Rs 6 lakh annually. This offers significant financial relief to property owners.

2. Simplified Tax Reporting
   Rental income will now be directly categorized under “Income from Housing Property,” making tax filing more streamlined.

3. Quicker Action on Non-Payment of Rent
   If a tenant fails to pay rent for three months or more, the landlord can approach the Rent Tribunal for faster resolution, ensuring better protection of their financial interests.

4. Tax Benefits for Repairs and Low Rent Housing
   Landlords may receive tax incentives under state schemes for offering properties at affordable rent or carrying out essential repairs.

How to Register a Rent Agreement

The process for registration has been made simple and user-friendly:

1. Visit the property registration website of your state.

2. Upload valid ID proofs of both the tenant and the landlord.

3. Fill in the rental details, including monthly rent and terms of occupancy.

4. Complete the process using e-sign and submit the form online.

The New Rent Agreement 2025 aims to modernize the rental ecosystem, bringing clarity, fairness, and efficiency to one of the most common housing arrangements in the country. With strict compliance requirements and well-defined rules, both tenants and landlords can expect smoother, safer, and more transparent rental transactions in the years ahead.