Union Budget 2025: TDS threshold limits hiked for rent, foreign travel | See full list

Nirmala Sitharaman said in Budget 2025 speech that the threshold amounts for tax deduction at source (TDS) will be increased for better clarity and uniformity

Updated on: Feb 1, 2025, 15:55:41 IST

By HT News Desk

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Union finance minister Nirmala Sitharaman in her Budget 2025 speech on Saturday proposed to rationalise tax deduction at source (TDS) by reducing the number of rates and thresholds above which TDS is deducted.

In her 8th consecutive budget speech, Nirmala Sitharaman said that the threshold amounts for tax deduction will be increased for better clarity and uniformity.

Union Finance Minister Nirmala Sitharaman presents the Union Budget 2025-26 in the Lok Sabha, in New Delhi, Saturday, Feb. 1, 2025. (Sansad TV)

She announced that the threshold for tax deduction on interest for senior citizens is being doubled from the present ₹50,000 to ₹1 lakh.

Similarly, the annual limit of ₹2.40 lakh for TDS on rent has been increased to ₹6 lakh. She added that this will reduce the number of transactions liable for TDS, thus benefitting small tax payers receiving small payments.

The threshold to collect tax at source (TCS) on remittances under RBI’s Liberalized Remittance Scheme (LRS) has been proposed to be increased from ₹7 lakh to ₹10 lakh. The finance minister also also proposed to remove TCS on remittances for education purposes, where such remittance is out of a loan taken from a specified financial institution.

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Both TDS and TCS are being applied on any transaction relating to sale of goods. To prevent such compliance difficulties, Sitharaman proposed to omit the TCS. She also proposed that the provisions of the higher TDS deduction will now apply only in non-PAN cases.

She said that in July 2024, the delay for payment of TDS up to the due date of filing statement was decriminalised and proposed to provide the same relaxation to TCS provisions as well.

Here are the key change to TDS thresholds

Provision	Present TDS /TCS Threshold (Rs)	Proposed TDS /TCS Threshold (Rs)
193 - Interest on securities	Nil	10,000/-
194A - Interest other than Interest on securities	(i) 50,000/- for senior citizen; (ii) 40,000/- in case of others when payer is bank, cooperative society and post office (iii) 5,000/- in other cases	(i) 1,00,000/- for senior citizen (ii) 50,000/- in case of others when payer is bank, co-operative society and post office (iii) 10,000/- in other cases
194 – Dividend, for an individual shareholder	5,000/-	10,000/-
194K - Income in respect of units of a mutual fund or specified company or undertaking	5,000/-	10,000/-
194B - Winnings from lottery, crossword puzzle etc.	Aggregate of amounts exceeding 10,000/- during the financial year	10,000/- in respect of a single transaction
194BB - Winnings from horse race		10,000/- in respect of a single transaction
194D - Insurance commission	15,000/-	20,000/-
194G - Income by way of commission, prize etc. on lottery tickets	15,000/-	20,000/-
194H - Commission or brokerage	15,000/-	20,000/-
194-I Rent	2,40,000/- during the financial year	50,000/- per month or part of a month
194J - Fee for professional or technical services	30,000/-	50,000/-
194LA - Income by way of enhanced compensation	2,50,000/-	5,00,000/-
206C(1G) – Remittance under LRS and overseas tour program package	7,00,000/-	10,00,000/-

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