In the Union Budget 2025-26, the government announced key revisions to the Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) structure aimed at simplifying tax compliance.
The number of rates and thresholds above which TDS is deducted will be reduced to streamline the process.
For senior citizens, the limit for tax deduction on interest income has been doubled from ₹50,000 to ₹1 lakh, providing significant relief. Additionally, the annual TDS limit on rent payments has been increased from ₹2.4 lakh to ₹6 lakh, easing the tax burden on tenants and landlords alike.
The threshold for TCS on remittances under the RBI’s Liberalized Remittance Scheme (LRS) has been raised from ₹7 lakh to ₹10 lakh, offering more flexibility for individuals sending money abroad.
In a move to simplify goods transactions, the budget specifies that only TDS, and not TCS, will be levied on goods sales, reducing complexities for businesses involved in the sale of goods.