The government has introduced new rules for TDS (Tax Deducted at Source) and TCS (Tax Collected at Source), set to take effect from April 1, 2025. If you pay rent, earn interest from bank deposits, or receive dividend income, these changes are crucial for you. Understanding these updates will help you avoid any financial complications.
Key Updates in TDS & TCS Rules
TDS on Interest Income
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Senior citizens earning up to ₹1 lakh in interest annually will not be subject to TDS. Previously, this limit was ₹50,000.
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For others, the TDS-free interest income threshold has been raised from ₹40,000 to ₹50,000.
TDS on House Rent
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The TDS threshold for rental income has increased from ₹2.4 lakh per annum to ₹6 lakh per annum.
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If you pay up to ₹50,000 per month in rent, you are not required to deduct TDS. Earlier, tenants had to deduct TDS for rents exceeding ₹20,000 per month.
TDS on Dividend Income
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Investors in stocks and mutual funds will now face TDS deductions only if their dividend or mutual fund unit income exceeds ₹10,000. Earlier, this limit was ₹5,000.
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The same ₹10,000 limit applies to interest earnings from debentures issued by public companies.
TCS on Sending Money Abroad
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The TCS-free limit for sending money abroad under the Liberalised Remittance Scheme (LRS) has increased from ₹7 lakh to ₹10 lakh.
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No TCS will be charged on money sent abroad for education loans taken from specific institutions. Previously, a 0.5% TCS applied to education loans exceeding ₹7 lakh.
Why These Changes Matter?
These revisions simplify tax deduction rules, benefiting senior citizens, tenants, professionals, and investors. Additionally, the increase in the TCS limit will help those funding education or travel abroad. Make sure to review these updates carefully to stay compliant and avoid any tax-related issues.
