Thresholds on TDS, TCS relaxed in major reprieve for salaried class, senior citizens

The Union Budget for FY26 has raised thresholds for tax deducted at source (TDS) across various income sources.

- Akriti Anand and Shipra Singh

NEW DELHI:

Among the key changes, the biggest relief comes to senior citizens who depend on interest income in their retirement. The limit for TDS on interest earned would be doubled from the current ₹50,000 to ₹1 lakh for senior citizens. For others, this exemption limit has been increased from the current ₹40,000 to ₹50,000 on interest from deposits.

Currently, TDS is deducted at interest income above ₹50,000 for senior citizens with total income less than the tax exemption limit of ₹3 lakh (in the new tax regime). They then would have to file an income tax return (ITR) to claim a refund. To avoid claiming a refund, senior citizens could submit Form 15H to request the bank to not deduct TDS.

The ₹1 lakh exemption limit will ease this compliance burden.