Budget 2025: New norms for TDS, TCS introduced

The government also proposed to remove TCS on remittances for education purposes, where remittance is funded through a loan from a specified financial institution.
Union Finance Minister Nirmala Sitharaman addresses a post-budget press conference, in New Delhi, Saturday, Feb. 1, 2025.
Union Finance Minister Nirmala Sitharaman addresses a post-budget press conference, in New Delhi, Saturday, Feb. 1, 2025.Photo | PTI
Updated on
2 min read

BENGALURU: In a significant step to simplify the tax regime and also to reduce the compliance burden, the government has announced to reduce the number of TDS (tax deducted at source) rates. Also, the threshold amount for tax deduction will be increased.

"The limit for tax deduction on interest for senior citizens is being doubled from the present Rs 50,000 to Rs 1 lakh," Finance Minister Nirmala Sitharaman said.

Another major change is the increase in the TDS limit for rent from Rs 2.40 lakh to Rs 6 lakh. "This will reduce the number of transactions liable to TDS, thus benefiting small taxpayers receiving small payments," she said.

Senior Citizens have over 38% share of the aggregate individual deposits as of March 2024. The TDS limit increase for senior citizens to facilitate deposit mobilisation and support banks’ Credit to Deposit ratio, said Sanjay Agarwal, Senior Director, CareEdge Ratings.

Also, the FM increased the TCS (tax collected at source) limit on remittances under RBI’s Liberalised Remittance Scheme (LRS) to Rs 10 lakh from the present Rs 7 lakh.

"The budget has also continued its efforts towards improving ease of doing business through multiple measures such as rationalisation of TDS and TCS compliances, changes to Transfer pricing assessments etc.. By prioritising these key areas, India can solidify its position as a frontrunner in the global economy," Aparna Iyer, CFO, Wipro Limited.

Sitharaman also proposed that the provisions of the higher TDS deduction will apply only in non-PAN cases.

Last year, it was announced that the delay for payment of TDS up to the due date of filing statement would be decriminalised. Now the same has been extended to TCS payments as well.

To reduce the compliance burden of the taxpayers, the FM also said that no tax will be collected at source on the sale of specified goods of value of more than Rs 50 lakh.

The government also proposed to remove TCS on remittances for education purposes, where remittance is funded through a loan from a specified financial institution.

Related Stories

No stories found.

X
The New Indian Express
www.newindianexpress.com