New Delhi: Finance Minister Nirmala Sitharaman on Saturday said that the limit for tax deduction on interest for senior citizens is being doubled from the present Rs 50,000 To Rs 1 Lakh.
“I propose to rationalize Tax Deduction at Source (TDS) by reducing the number of rates and thresholds above which TDS is deducted. Further, threshold amounts for tax deduction will be increased for better clarity and uniformity. The limit for tax deduction on interest for senior citizens is being doubled from the present Rs 50,000 to Rs 1 lakh,” FM said while announcing the Budget 2025.
Similarly, the annual limit of Rs 2.40 lakh for TDS on rent is being increased to Rs 6 lakh. This will reduce the number of transactions liable to TDS, thus benefitting small tax payers receiving small payments.
The threshold to collect tax at source (TCS) on remittances under RBI’s Liberalized Remittance Scheme (LRS) is proposed to be increased from Rs 7 lakh to Rs 10 lakh.
“I also propose to remove TCS on remittances for education purposes, where such remittance is out of a loan taken from a specified financial institution,” she said.
Both TDS and TCS are being applied on any transaction relating to sale of goods.
“To prevent such compliance difficulties, I propose to omit the TCS. I also propose that the provisions of the higher TDS deduction will now apply only in non-PAN cases,” FM said.
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