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Published 12:33 IST, February 1st 2025

Budget 2025 : Government Changes Annual Limit Of TDS - Details

The limit for tax deduction on interest for senior citizens is being doubled from the present ` 50,000 to ` 1 lakh.

Reported by: Money Desk
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Govt Alters TDS - Details
Govt Alters TDS - Details | Image: Republic

Finance Minister Nirmala Sitharaman presented the budget today, February 1, 2025, 11 am at the Parliament. 

Among a slew of measures for agriculture sector, financial stability, and tax reliefs, Sitharaman also spoke about changes in the Tax Deduction at Source (TDS) and Tax Collected at Source ( TCS )

Changes To TDS

“I propose to rationalize Tax Deduction at Source (TDS) by reducing the number of rates and thresholds above which TDS is deducted.” said Sitharaman in her budget speech. 

Further, threshold amounts for tax deduction will be increased for better clarity and uniformity. The limit for tax deduction on interest for senior citizens is being doubled from the present Rs 50,000 to Rs 1 lakh. 

Similarly, the annual limit of Rs 2.40 lakh for TDS on rent is being increased to  Rs 6 lakh. This will reduce the number of transactions liable to TDS, thus benefiting small tax payers receiving small payments.
 

Changes To TCS

The threshold to collect tax at source (TCS) on remittances under RBI ’s Liberalized Remittance Scheme (LRS) is proposed to be increased from  7 lakh to 10 lakh. “I also propose to remove TCS on remittances for education purposes, where such remittance is out of a loan taken from a specified financial institution.” she said.
 

Both TDS and TCS are being applied on any transaction relating to sale of goods. To prevent such compliance difficulties, “I propose to omit the TCS. I also propose that the provisions of the higher TDS deduction will now apply only in non-PAN cases.”, Sitharaman said.
 

In July 2024, the delay for payment of TDS up to the due date of filing statement was decriminalized. “I propose to provide the same relaxation to TCS provisions as well.” the FM said.

Updated 12:48 IST, February 1st 2025