Finance Desk – Starting April 1, 2025, new Tax Deducted at Source (TDS) rules will come into effect. These changes, announced in the Union Budget 2024 by Finance Minister Nirmala Sitharaman, aim to reduce the tax burden and increase disposable income for taxpayers. The updates will benefit senior citizens, investors, and commission earners.
- TDS Exemption for Senior Citizens
Senior citizens will not have to pay TDS on interest income up to ₹1 lakh from Fixed Deposits (FDs), Recurring Deposits (RDs), and similar savings instruments.
If the interest income exceeds ₹1 lakh per year, TDS will be deducted.
This is great news for senior citizens who rely on interest income for their daily expenses.
- Higher TDS Limit for Everyone
The TDS threshold on interest income has been increased from ₹40,000 to ₹50,000.
This means that banks will only deduct TDS if your interest income crosses ₹50,000 per year.
This provides relief to people who earn moderate interest income from deposits.
- Changes in TDS on Gaming Winnings
TDS will now be deducted only when total winnings exceed ₹10,000.
Previously, TDS was deducted even on small winnings by adding them up.
Now, if someone wins ₹8,000 multiple times, no TDS will be deducted unless the total winnings go over ₹10,000.
- Increased TDS Limit for Commission Earners
Insurance agents will now have a higher exemption limit of ₹20,000, up from ₹15,000.
Mutual fund and equity investors will also benefit, as the dividend tax exemption limit has been increased from ₹5,000 to ₹10,000.
Why These Changes Matter
These updates will help reduce the tax burden on individuals, provide more financial flexibility, and make the tax system simpler. The new rules are designed to make taxation fairer and more transparent, ensuring that people keep more of their hard-earned money.
The changes will take effect from April 2025, so it’s important to plan finances accordingly.
