Finance Minister Nirmala Sitharaman announced changes in some rules of TDS and TCS in the Union Budget 2025 presented on February 1. These rules will come into effect from April 1, 2025. The government has done this to simplify the rules of TDS and TCS.
The government has also changed the limit for TCS and TDS. Senior citizens, landlords and professionals providing technical services will benefit the most from this. Increasing the limit for TCS will benefit those traveling abroad and those who educate children abroad. Let us know about this in detail.
New rules for TDS on interest income
According to the new rule, interest income of up to Rs 1 lakh of senior citizens in a financial year will not come under the purview of TDS . Earlier its limit was Rs 50,000. This means that if you are a senior citizen and you get interest up to Rs 1 lakh on the money deposited in the bank in a financial year, then the bank will not deduct TDS on it . The bank will deduct TDS on it only if the interest income is more than Rs 1 lakh. For other people, this limit has been increased from Rs 40,000 to Rs 50,000.
New rules for TDS on house rent
The government has also increased the limit of TDS on rental income. It has been increased from Rs 2.4 lakh per annum to Rs 6 lakh. This means that if you pay rent up to Rs 50,000 per month to your landlord, then you will not need to deduct TDS on it. Currently, if the rent exceeds Rs 20,000, the tenant has to make the payment to the landlord after deducting TDS on it.
TDS on dividend income
TDS rules have also changed for investors of stocks and mutual funds. Now TDS will be deducted only if the dividend or income received from units of mutual funds or specific companies/undertakings is Rs 10,000. Currently this limit is Rs 5,000. The limit of TDS has also been increased to Rs 10,000 for interest received on debentures issued by a public company.
New TCS rules for sending money abroad
The government has also increased the limit of TCS in the case of Liberalised Remittance Scheme (LRS). Now if a person sends money abroad, an amount up to Rs 10 lakh will not come under the purview of TCS. Currently this limit is Rs 7 lakh. Apart from this, no TCS will be levied on sending money for education loan taken from certain institutions. Currently, a charge of 0.5 percent is levied if the amount of education loan is more than Rs 7 lakh.
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