Finance Minister Nirmala Sitharaman presented the Union Budget of 2025 before the parliament today at 11 pm. During the budget speech, the Finance Minister proposed the abolishment of Tax Collected at Source ( TCS ) on education loan-based foreign remittances. The budget contains a comprehensive roadmap for the coming year.
In order to ease the financial burdens, the threshold for collecting Tax Collected at Source ( TCS ) on remittances under the RBI’s Liberalised Remittance Scheme ( LRS ) will be raised from Rs. 7 lakh to Rs. 10 lakh. This will benefit individuals making foreign remittances by reducing their tax liability. Additionally, students and families will get relief as TCS on education-related remittances will be removed when the funds come from a recognised financial institution.
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To further ease compliance, the budget proposes removing TCS on the sale of goods to avoid overlapping with Tax Deducted at Source (TDS). Another important change is that the higher TDS deduction will now apply only to cases where the taxpayer does not have a PAN, ensuring that those with proper documentation face fewer complications. These measures aim to simplify the tax system and reduce unnecessary burdens.
Interestingly, in July 2024, the delay in paying TDS up to the due date of filing a statement was decriminalised, and the FM has recommended relaxing the TCS provisions as well.
The main focus is being emphasised on taxational reforms. The major focus is on simplifying the tax structure to enhance compliance and reduce litigation. The minister also said that she will be presenting the new Income Tax Bill next week.
The budget has proposed to relax penalties for delayed payments under the Tax Collected at Source ( TCS ) provisions, similar to the change made for Tax Deducted at Source ( TDS ) in July 2024. Under the new proposal, businesses will not face criminal charges for late TCS payments, as long as the payment is made before the due date for filing the relevant statement.
Read More: Top Stories Budget 2025 proposes Decriminalisation of Delayed TCS Payments
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