TDS Rules From April 1: People will get a big relief in terms of TDS from April 1, 2025. The implementation of the new TDS rules will benefit FD investors more.
TDS Rules From April 1: In the Union Budget-2025, the government had announced several changes related to taxes. In this regard, some changes have been made in the rules on tax deduction at source (TDS). This change will be implemented from April 1, 2025. After this change, people making Fixed Deposits (FD) are expected to get relief.
TDS is a tax deducted at source. When the interest earned on an FD in a bank exceeds a certain limit, the bank has to deduct TDS. This limit is different for senior citizens and non-senior citizens. The budget proposed to rationalize these limits so that you do not have to face unnecessary TDS deductions repeatedly.
New TDS limit for senior citizens: To benefit senior citizens, the government has doubled the TDS limit on interest income. From April 1, TDS will be deducted by banks only if the total interest income in a financial year exceeds Rs 1 lakh. This means that if a senior citizen’s total interest income remains within this limit, no TDS will be deducted. This rule applies to interest earned from fixed deposits (FD), recurring deposits (RD) and other savings instruments.
New TDS limit for common citizens: The limit of TDS on interest income for common citizens has been increased from Rs 40,000 to Rs 50,000. If the total interest income remains within Rs 50,000, no TDS will be deducted. This change has been made with the aim of reducing the tax burden on those who depend on FD interest.
TDS on Lottery: The government has simplified the TDS rules related to lottery. Earlier, TDS was deducted if the total winnings in a year were more than Rs 10,000. Now TDS will be deducted only if the transaction is more than Rs 10,000.
Insurance Commission: Insurance companies, agents and brokers will now get the benefit of higher TDS limit. The TDS limit on insurance commission has been increased from Rs 15,000 to Rs 20,000.
Mutual Funds and Shares: Investors investing in mutual funds and shares will now get the benefit of higher exemption limit. The TDS limit on dividend income has been increased from Rs 5,000 to Rs 10,000.
