TDS, TCS rates rationalised, new norms mooted

IN a significant step to simplify the tax regime and also to reduce compliance burden, the government has announced to reduce the number of TDS (tax deducted at source) rates. Also, the threshold amount for tax deduction will be increased.

- UMA KANNAN @ Bengaluru

"The limit for tax deduction on interest for senior citizens is being doubled from the present ₹50,000 to ₹1 lakh," Finance minister Nirmala Sitharaman said.

Another major change is the increase in the TDS limit for rent from ₹2.40 lakh to ₹6 lakh. "This will reduce the number of transactions liable to TDS, thus benefiting small taxpayers receiving small payments," she said. Senior citizens have over 38% share of the aggregate individual deposits as of March 2024. The TDS limit increase for senior citizens to facilitate deposit mobilisation and support banks' Credit to Deposit ratio, said Sanjay Agarwal, senior director, CareEdge Ratings.