TDS: Threshold Amount will be Increased, Tax Rates will be Revised, says FM during Budget Speech
TDS – Threshold amount – Threshold – Threshold amount will be increased – Tax rates – Tax rates will be revised – FM – Budget Speech – Union Budget 2025 – Budget 2025 India – site image
TDS – Threshold amount – Threshold – Threshold amount will be increased – Tax rates – Tax rates will be revised – FM – Budget Speech – Union Budget 2025 – Budget 2025 India – site image
Thе Uniоn Вudget 2025 wаs presented by thе Finаnce Minister, Nirmаlа Sithаrаmаn, on February 1st, 2025, аt 11:00 а.m., befоre thе Pаrliаment. Thе Uniоn Вudget is thе аnnuаl finаnciаl stаtement thе Gоvernment of Indiа prеsеnts, outlining its estimаted revenue аnd expenditure fоr thе upcоming fiscаl yeаr аnd serving аs а roаdmаp fоr thе country's еconomic prioritiеs.
The FM introduced major reforms to the Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) regulations. These changes were made to make tax compliance more straightforward, less complicated for small taxpayers, and more business-friendly. The adjustments will impact individuals and corporations, including higher TDS threshold limits and updated tax rates.
The Government has raised TDS exemption limits across various categories. A new threshold of ₹10,000 is introduced, exempting small-interest income earners from TDS deductions. For senior citizens, the TDS exemption limit is doubled from ₹50,000 to ₹1,00,000, while for others, it is increased from ₹40,000 to ₹50,000.
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The dividend income threshold has been increased from ₹5000 to ₹10,000. Also, the finance minister asserted that TDS will now apply to individuals winning above ₹10,000 per transaction rather than the earlier ₹10,000 annual limit. The threshold limit for commission or brokerage has been increased from ₹15,000 to ₹20,000, and instead of a yearly limit of ₹2,40,000 on rent payments, the new reform allows ₹50,000 per month as the threshold, making it more easier for landlords. The Budget also raises the exemption threshold for the Insurance Commission from ₹15,000 to ₹20,000.
The government has also revised TDS and TCS rates across multiple sectors to streamline tax collection. TDS for Individuals and Hindu Undived families (HUFs) is reduced from 25% to 10%. The TCS rate for timber and Forest produce is lowered from 2.5% to 2%. The Budget removes the TCS on remittances exceeding ₹7 Lakh for education when financed by a loan.
Furthermore, to make tax compliance easier and encourage voluntary tax participation, the government is removing Sections 206AB and 206CCA, which impose higher TDS/TCS rates on non-filers. The requirement for collecting TCS on large transactions exceeding ₹59 lakh is also removed, which will reduce compliance burdens for businesses. The government proposes to adopt these reforms to benefit small taxpayers, senior citizens, and companies, fostering economic growth and better tax participation.
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