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Finance Minister Nirmala Sitharaman presented the Union Budget for 2025 in Parliament on Saturday (February 1, 2025.) In her record eighth budget, she introduced several measures pertaining to personal finance, including the rationalisation of TDS (Tax Deducted at Source) and TCS (Tax Collected at Source).
Also read: Union Budget 2025 LIVE updates
Three announcements were particularly noteworthy. First, the limit for tax deduction on interest for senior citizens has been doubled from the present ₹50,000 to ₹1 lakh. “Threshold amounts for tax deduction will be increased for better clarity and uniformity, ” Ms. Sitharaman said.
Second, the annual limit of ₹2.4 lakh for TDS on rent was increased to ₹6 lakh, a move the Finance Minister said would “reduce the number of transactions liable to TDS, thus benefitting small tax payers receiving small payments.” And lastly, the threshold to collect TCS on remittances under RBI’s Liberalized Remittance Scheme (LRS) was increased from ₹7 lakh to ₹10 lakh.
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Another important proposal was to decriminalise the delay in payment for TCS up to the due date for filing statements, just as it has been done for TDS in July 2024. Further, Ms. Sitharaman proposed the removal of TCS on remittances for education, where such remittance was out of a loan from a specified financial institution. Since both TDS and TCS were being applied on sale of goods transactions, creating potential difficulties with compliance, Ms. Sitharaman announced that TCS would be removed for such transactions. Provisions to deduct higher TDS will henceforth only apply in non-PAN cases, the Minister noted in her speech.
Published – February 01, 2025 04:31 pm IST
