Changes in TDS Rules 2025: Finance Minister Nirmala Sitharaman announced major changes in the tax deduction (TDS) rules at the source in the budget presented on 1 February. The new TDS rule will be applicable from 1 April. After the implementation of the new rules, investors making fixed deposits (FDs) and recurrent deposits (RD) will get great relief. In which the limit of TDS deduction on income from FD has been doubled by providing relief to senior citizens. Relief has also been provided to ordinary citizens. From April 1, TDS deduction on interest income from fixed deposits (FD), recurring deposits (RD) etc. for senior citizens will be given only when interest income in the financial year is Rs 5 lakh. More than 1 lakh. This means that if the interest income of a senior citizen is less than Rs 1 lakh, then he will not have to pay TDS.
Relief for common people
For ordinary citizens, the government has increased the TDS limit from Rs 40,000 to Rs 50,000 on interest income from April 2025. The move aims to reduce the tax burden on the depositors, especially on those who depend on FD interest as their primary source of income. As per the revised rules, if the total annual interest amount is more than Rs 50,000, the bank will deduct TDS. However, if a common citizen keeps his interest income within the limit of Rs 50,000, the bank will not deduct any TDS.
TDS on lottery
The government has simplified the TDS rules on the amount won by lottery, crosswords and horse raping. Earlier, TDS was deducted when the total win was more than Rs 10,000 in a year. Now TDS will be deducted only when the transaction is more than Rs 10,000. The TDS limit for various commissions was also increased in Budget 2025, providing relief to insurance agents and brokers. The TDS limit for insurance commission has been increased from April 1, 2025 to Rs 15,000 to Rs 20,000. The limit of dividends and income received from MF units or some companies has been increased from Rs 5,000 to Rs 10,000 for mutual funds (MFs) or shares.
