Finance Minister Nirmala Sitarman has announced a change in tax collected tax and tax collected tax in the Source (TDS) in Budget 2025. The government’s purpose makes compliance easier for taxpayers, making the tax deduction and collection simplified at the source.
Reduction in TDS rates and increased threshold
To rationalize TDS and reduce compliance difficulties, the government will reduce the number of TDS rates and increase the threshold volume. One of the major changes is ₹ 2.40 lakh to ₹ 6 lakh annually for rent in the TDS range.
This will benefit small taxpayers in receiving small payments by reducing the number of transactions responsible for TDS.
Additionally, the limit of tax deduction on interest earned by senior citizens will double from the current ₹ 50,000 to ₹ 1 lakh, which will reduce their tax burden.
High discount limits for TCS on LRS transactions
For transactions under the liberal remittance scheme (LRS), the TCS exemption limit has been increased from ₹ 7 lakh to ₹ 10 lakh.
This means that the remittance of up to ₹ 10 lakh in the financial year will not attract TCS, offering relief to the people sending money abroad.
In addition, the government has proposed to abolish TCS on remittances made for the objectives of education when remittances are funded through loans from a specified financial institution.
TCS to leave the sale of goods
In an attempt to prevent compliance difficulties, the government has decided to remove TCS application on transactions related to sale of goods. Additionally, the provision for high TDS deduction will now be applicable only in cases where the taxpayer does not have a permanent account number (PAN).
New income tax bill introduced
The Finance Minister also announced that a new income tax bill would be introduced next week. This bill will maintain about half of the existing provisions by incorporating reforms aimed at benefiting the middle class.
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(Tagstotransite) Budget 2025 (T) Income Tax (T) Income Tax Bill (T) Budget 2025 Tax Bill
