New TDS rules effective April 1 benefit investors, seniors

Starting April 1, 2025, important changes to Tax Deducted at Source (TDS) rules will take effect in India. These updates aim to lessen the tax burden for many individuals, including senior citizens, investors, and commission earners. One significant change is for senior citizens. They will no longer face TDS on interest income up to Rs 1 lakh from Fixed Deposits and similar accounts. However, if their interest income exceeds Rs 1 lakh in a financial year, TDS will still be applied. This change will help senior citizens who rely on interest as a key source of income. For the general public, the TDS threshold on interest income has increased from Rs 40,000 to Rs 50,000. This means banks will only deduct TDS if an individual's annual interest income is more than Rs 50,000, providing relief for those with moderate earnings. The rules regarding gaming winnings are also changing. TDS will now only be deducted if a person’s total winnings exceed Rs 10,000. This simplifies the process, as multiple smaller wins will not accumulate to trigger TDS. Commission earners will also benefit from higher TDS thresholds. For insurance agents, the threshold has increased from Rs 15,000 to Rs 20,000. Additionally, the dividend tax exemption limit for mutual funds and equities has been raised from Rs 5,000 to Rs 10,000. Overall, these new TDS rules represent a significant effort to reduce the tax burden and improve compliance. They aim to create a clearer and more taxpayer-friendly system beginning next year.