Budget 2025: TDS Limit on Income by way of Enhanced Compensation of Certain Immovable Properties Increased
The present TDS and TCS threshold is Rs. 2.5 lakhs, and the proposed TDS and TCS threshold is Rs. 5 lakhs. In short, the threshold has been doubled, which definitely a positive step by the union government
The Union Finance Minister Nirmala Sitharaman presented the Union Budget of 2025-26 before the parliament on February 1st at 11 AM. During the budget speech, the finance minister proposed that the tax deducted at source ( TDS ) on income by way of enhanced compensation of certain immovable properties be increased. Section 194LA of the Income Tax Act, 1961, specifies requirements for TDS...
The Union Finance Minister Nirmala Sitharaman presented the Union Budget of 2025-26 before the parliament on February 1st at 11 AM. During the budget speech, the finance minister proposed that the tax deducted at source ( TDS ) on income by way of enhanced compensation of certain immovable properties be increased. Section 194LA of the Income Tax Act, 1961, specifies requirements for TDS on compensation paid in the event of compulsory acquisition of immovable property.
This is the FM's eighth budget presentation, a record for Indian FM. It is widely acknowledged that policymakers must be flexible in their approach. Taxation has been identified as the primary emphasis of the 2025 budget landscape. The budget provides a complete roadmap for the future year.
Section 194LA of the Income Tax Act, 1961, deals with the income by way of enhanced compensation. The present TDS and TCS threshold is Rs. 2.5 lakhs, and the proposed TDS and TCS threshold is Rs. 5 lakhs. In short, the threshold has been doubled, which is definitely a positive step by the union government.
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The main focus is being emphasised on taxational reforms. 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 in next week.
This is a welcoming move, and this seems like a middle-class-friendly initiative by the central government, which again is focusing on the growth of the working class.
These initiatives reflect the government's strategy to balance fiscal consolidation with growth, aiming for sustainable and inclusive economic development. With the country facing inflation, it is expected that the budget for 2025 would regularise the taxes and reduce the burden on the common man.
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Also, 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. To know more read: Budget 2025 proposes Decriminalisation of Delayed TCS Payments
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