TDS (Tax Deducted at Source) Changes:
- Section 194A – Interest Other Than Interest on Securities:
- Senior Citizens: The TDS exemption limit has been increased from ₹50,000 to ₹1,00,000 per financial year.
- Others: The exemption limit has been raised from ₹40,000 to ₹50,000 per financial year.
- Section 194 – Dividend Income:
- The TDS exemption limit has been increased from ₹5,000 to ₹10,000 per financial year.
- Section 194DA – Life Insurance Policy Payouts:
- The TDS exemption limit has been increased from ₹1,00,000 to ₹2,50,000.
- Section 194H – Commission or Brokerage:
- The TDS exemption limit has been increased from ₹15,000 to ₹20,000 per financial year.
- Section 194I – Rent:
- TDS is now applicable if the monthly rent exceeds ₹50,000. This means that any rental payment of ₹50,000 or more per month will attract TDS.
- Section 194J – Fees for Professional or Technical Services:
- The TDS exemption limit has been increased from ₹30,000 to ₹50,000 per financial year.
- Section 194B & 194BB – Winnings from Lottery, Crossword Puzzles, and Horse Racing:
- TDS will now be deducted only if a single transaction exceeds ₹10,000, replacing the previous aggregate limit.
- Section 206AB – Higher TDS Rates for Non-Filers:
- This section has been omitted, removing the provision for higher TDS rates for non-filers of income tax returns.
TCS (Tax Collected at Source) Changes:
- Section 206C(1H) – TCS on Sale of Goods:
- This section has been omitted to avoid overlap with TDS provisions under Section 194Q.
- Section 206C(1G) – TCS on Foreign Remittances under LRS and Overseas Tour Packages:
- Threshold Increase: The exemption limit for TCS on foreign remittances under LRS has been increased from ₹7,00,000 to ₹10,00,000 per financial year.
- Education Loans: Remittances for education financed by loans from specified financial institutions are now exempt from TCS.
- TCS Rates:
- Education and Medical Treatment: 5% TCS on amounts exceeding ₹10,00,000.
- Other Remittances: 20% TCS on amounts exceeding ₹10,00,000.
- Section 206CCA – Higher TCS Rates for Non-Filers:
- This section has been omitted, removing the provision for higher TCS rates for non-filers of income tax returns.
- Section 276BB – Prosecution for Failure to Pay TCS:
- Prosecution will not be initiated if the TCS is deposited before the due date for filing the quarterly statement under Section 206C(3).
These amendments aim to simplify tax compliance and reduce the burden on taxpayers.
Summary:
| Section | New Threshold & Rate (Effective April 1, 2025) | Old Threshold & Rate (Before April 1, 2025) |
| 194A (Interest Income) | ₹1,00,000 (Senior Citizens) / ₹50,000 (Others) | 10% | ₹50,000 (Senior Citizens) / ₹40,000 (Others) | 10% |
| 194 (Dividend Income) | ₹10,000 | 10% | ₹5,000 | 10% |
| 194DA (Life Insurance Payouts) | ₹2,50,000 | 5% | ₹1,00,000 | 5% |
| 194H (Commission/Brokerage) | ₹20,000 | 2% | ₹15,000 | 2% |
| 194I (Rent) | ₹50,000 per month | 10% (Land/Building), 2% (Plant & Machinery) | ₹2,40,000 per year | 10% (Land/Building), 2% (Plant & Machinery) |
| 194J (Professional/Technical Fees) | ₹50,000 | 10% | ₹30,000 | 10% |
| 194B & 194BB (Lottery, Horse Race Winnings) | >₹10,000 per transaction | 30% | >₹10,000 (Aggregate) | 30% |
| 206AB (Higher TDS for Non-Filers) | Removed | Higher TDS on non-filers |
| 206C(1H) (TCS on Sale of Goods) | Removed | 0.1% on Sales > ₹50 Lakh |
| 206C(1G) (TCS on Foreign Remittances & Tour Packages) | ₹10,00,000 Exemption Limit | 5% (Education/Medical), 20% (Others) | ₹7,00,000 Exemption Limit | 5% (Education/Medical), 20% (Others) |
| 206CCA (Higher TCS for Non-Filers) | Removed | Higher TCS on non-filers |
| 276BB (TCS Prosecution Relaxation) | No prosecution if TCS deposited before due date | Prosecution applicable for delayed TCS payments |