New TDS Rules: The Union Budget 2025 presentation of Finance Minister Nirmala Citraman included significant amendments in TDS (tax deducted at source) regulations, providing financial benefits to various taxpayers categories including senior citizens, investors and commissioner Arjak. These changes in TDS rules will be effective from April 1, 2025.
New TDS boundaries for senior citizens
The objective of the Union Budget 2025 is to increase disposable income for middle class and senior citizens. According to the ET report, the interest earning of April 1, 2025 will have to be deducted from FDS, RD and similar equipment, when the cumulative amount in the bank exceeds Rs 1 lakh during a financial year. Senior citizens who maintain interest earning less than Rs 1 lakh will be exempted from bank TDS deduction.
Revised TDS Threshold for regular citizens
For regular citizens, the government has increased the TDS limit on interest income from Rs 40,000 starting from April 2025. This adjustment tries to reduce the tax obligations of the depositors, especially affects individuals dependent on FD interest for primary income.
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Under the new rules, banks will implement TD when the annual interest yoga exceeds Rs 50,000. Regular citizens with interest earning within Rs 50,000 will avoid the TDS deduction.
TDS rules simple for gaming win
The government has strengthened TDS rules for lottery win, crossword puzzles and horse racing by abolishing an annual total limit of Rs 10,000. The new regulation specifies that TDS applies only when a single win exceeds Rs 10,000, replacing the previous system where tax was cut when the cumulative victory was exceeding Rs 10,000 annually.
For example: If a person wins Rs 8,000 three times, a total of Rs 24,000, no TDS will apply under the new rule, as each individual victory is less than Rs 10,000. The ET report says that earlier, the TDS applied to the total amount.
Insurance and brokerage commission update
Budget 2025 presented higher TDS Threshold for Command EarningInsurance agents will benefit from the increased TDS limit of Rs 20,000, from Rs 15,000, effective from 1 April, 2025. The purpose of these adjustments is to reduce compliance requirements and improve cash flow for small earnings.
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Investment income change
For investors in mutual funds and shares, dividend and income exemption limit has been increased from Rs 10,000 to Rs 5,000.
Dividend tax modifications
From April 1, 2025, investors will enjoy the limit of Rs 10,000, increase from Rs 5,000 to increase from Rs 5,000. This change benefits equity and mutual fund investors, as TDS will only apply when dividend income is more than Rs 10,000.
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