Changes proposed in Finance Bill 2025 w.r.t rates and threshold of TDS & TCS

Shree , Last updated: 04 February 2025
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Q.1 What are the main changes in Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) proposed by the Budget 2025?

Ans. (i) To improve ease of doing business and better compliance by taxpayers, certain rates of TDS and TCS has been rationalized.

(ii) Threshold limit for applicability of the TDS and TCS provisions has also been increased.

Ans. Following changes are proposed in the rates of TDS and TCS:

S.No	Section of the Act	Existing TDS/TCS Rate	ProposedTDS/TCS Rate
1	Section 194LBC - Income in respect of investment in securitization trust	25% if payee is Individual or HUF and 20% otherwise	10%
2	Sub-section (1) of section 206C - TCS on Timber or any other forest produce (not being tendu leaves) obtained under a forest lease and timber obtained by any mode other than under a forest lease	2.5%	2%
3	Sub-section (1G) of section 206C - TCS on remittance under LRS for purpose of education, financed by loan from financial institution	0.5% after Rs. 7 lakh	Nil

Ans. Following changes are proposed in the threshold of TDS and TCS:

S. No.	Section of the Act	Present TDS/TCSthreshold (in Rs.)	Proposed TDS/TCS threshold (in Rs.)
1	193 - Interest on securities	Nil	10,000/-
2	194A - Interest other than Interest on securities	(i) 50,000/- for senior citizen; (ii) 40,000/- in case of others when payer is bank, cooperative society and post office (iii) 5,000/- in other cases	(i) 1,00,000/- for senior citizen (ii) 50,000/- in case of others when payer is bank, co-operative society and post office (iii) 10,000/- in other cases
3	194 - Dividend, for an individual shareholder	5,000/-	10,000/-
4	194K - Income in respect of units of a mutual fund or specified company or undertaking	5,000/-	10,000/-
5	194B - Winnings from lottery, crossword puzzle etc.	Aggregate of amounts exceeding10,000/- during the financial year	10,000/- in respect of a single transaction
6	194BB - Winnings fromhorse race
7	194D - Insurance commission	15,000/-	20,000/-
8	194G - Income by way of commission, prize etc. on lottery tickets	15,000/-	20,000/-
9	194H - Commission or brokerage	15,000/-	20,000/-
10	194-I Rent	2,40,000/- during the financial year	50,000/- per month or part of a month
11	194J - Fee for professional or technical services	30,000/-	50,000/-
12	194LA - Income by way of enhanced compensation	2,50,000/-	5,00,000/-
13	206C(1G)- Remittance under LRS and overseas tour program package	7,00,000/-	10,00,000/-