The budget suggests the rationalization of TDS limits on interest received, rent paid, and other valuable transactions
TDS and TCS Changes Announced in Union Budget 2025 latest news: Finance Minister Nirmala Sitharaman, in the Union Budget 2025, made important changes to the Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) rules to make tax compliance easy. The changes will be operational from April 1, 2025, and are expected to ease the tax burden of ordinary taxpayers and business entities by doing away with unwanted complexities.
New TDS Thresholds: The budget suggests the rationalization of TDS limits on interest received, rent paid, and other valuable transactions. The idea behind this is to curtail frequent deduction of tax, simplify cash flow, and reduce avoidable deductions.
Relief in Remittance of Money Abroad: The limit of TCS-free remittance has been increased from INR 7 lakhs to INR 10 lakhs. Be it for children's education, family needs, or other uses, you can now send up to INR 10 lakhs overseas without TCS, making financial transactions less cumbersome. Further, no TCS would be charged if the remittance is being done via an education loan.
Good News for Traders: TCS on sales over INR 50 lakhs has been removed. With effect from April 1, 2025, companies will no longer be required to deduct 0.1% TCS on high-value sales. This will enhance cash flow for traders and ease tax compliance.
No More Higher TDS/TCS for Non-Filers: Earlier, non-filers of income tax returns (ITR) were subjected to higher TDS/TCS deductions. Budget 2025 suggests eliminating this provision, offering relief to ordinary taxpayers and small businesses from excessive taxation.
No Fear of Imprisonment for Delayed TCS Deposit: Earlier, delay in deposit of TCS could attract imprisonment of 3 months to 7 years and a penalty. Budget 2025 relaxes this provision by providing that no action would be initiated if pending TCS is deposited within the specified time.
These reforms are intended to give taxpayers a smoother experience in terms of tax collections and deductions, particularly in the context of remittance of funds abroad, high-value transactions, and processing business transactions. The objective of the central government is to minimize hassles and make the tax system more efficient and transparent.
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