How to benefit new TDS border taxpayers and seniors – CNBC TV18

Finance Minister Nirmala Sitarman’s budget 2025 sources (TDS) rules make some significant changes in tax cut. The government has proposed an increased limit for TDs under various sections. The purpose of these changes is to reduce compliance burden, especially for small taxpayers.

There is an observation of amendments proposed for TDS Threshold in various payments here.

TDS Threshold for banking companies

Currently, TDS is required when interest payment by the banking company is more than ₹ 40,000 annually. The proposed increase in this threshold will increase the limit of ₹ 50,000.

For senior citizens, the current threshold is 50,000, but under the new proposal it will increase to ₹ 1 lakh.

This change will allow senior citizens to earn more interest income without the need for TDS deduction.

TDS Threshold for Cooperative Societies

The TDS limit for a cooperative society engaged in banking will also increase from ₹ 40,000 to ₹ 50,000, which will correspond to other banking institutions.

For senior citizens, the boundary will increase from ₹ 50,000 to ₹ 1 lakh.

TD on post office deposit

TDS currently on deposits with post offices under any government scheme. Kicks after 40,000. The proposed limit will increase this limit to ₹ 50,000, which will benefit small depositors.

For senior citizens, it will go from ₹ 50,000 to ₹ 1 lakh

TD for other cases

For cases other than banking and post office deposits, TDS Threshold is currently ₹ 5,000. The proposed increase will increase this amount to ₹ 10,000.

This will reduce the number of taxpayers who have to deal with TDs, especially for small payments where TDs are applied to the first low range.

TD for specific cooperative societies

For the cooperative societies mentioned under Section 194A, TDS Threshold will also increase from ₹ 40,000. Like other categories, senior citizens will see an increase from ₹ 50,000 to ₹ 1 lakh.

Why do these changes matter

The increase in TDS Threshold is part of the government’s effort to reduce tax burden on small taxpayers. This change is important for senior citizens, which often depend on interest income from banks, post offices and cooperative societies.

Naveen Wadhwa, vice president of taxman, said, “The Finance Minister recognized the importance of consumption in our economy. By reducing the threshold for TD and reducing tax rates, the government is paying more money to individual taxpayers.”

These amendments are ready to be effective from April 1, 2025, and the evaluation will apply for the year 2025-26.