TDS Rate Chart FY 2024-25 (AY 2025-26): Latest Updates & Exemptions

Tax Deducted at Source (TDS) is an essential mechanism for income tax collection in India, ensuring tax is deducted at the source of income generation. This system helps prevent tax evasion by collecting tax at the time of earning rather than at a later stage. TDS applies to various income types, including salaries, interest on deposits, dividends, rent, and commissions. The government revises TDS rules periodically to streamline tax compliance and provide relief to taxpayers.

In the Union Budget 2025, Finance Minister Nirmala Sitharaman introduced significant changes to the TDS framework. The government has increased exemption thresholds across multiple categories, simplifying compliance and reducing the tax burden, particularly for senior citizens and small taxpayers. The rationalization of TDS rates and thresholds aims to provide greater clarity and uniformity.

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Key Changes in TDS for FY 2024-25

One of the most significant relief measures is the increase in the TDS exemption limit for senior citizens on interest income from fixed deposits, which has been raised from ₹50,000 to ₹1,00,000. Other notable changes include:

• The annual TDS exemption limit on rent payments has increased from ₹2.40 lakh to ₹6 lakh.
• A new TDS exemption threshold for interest on securities has been introduced at ₹10,000.
• The TDS deduction limit for dividends paid to individual shareholders has been doubled from ₹5,000 to ₹10,000.
• Commission and brokerage exemption limits have been raised from ₹15,000 to ₹20,000.
• The threshold for professional or technical services has been increased from ₹30,000 to ₹50,000.
• Overseas remittances under the Liberalized Remittance Scheme (LRS) and overseas tour packages now have a higher threshold for Tax Collected at Source (TCS), increasing from ₹7 lakh to ₹10 lakh.

Full List of Revised TDS/TCS Rates for FY 2024-25

The government has rationalized the TDS and TCS framework to ease compliance challenges, particularly benefiting middle-income earners. Below is a detailed comparison of existing and revised limits:

Additional Announcements

• TCS on remittances for education purposes, financed through loans from specified financial institutions (under Section 80E), will be removed.
• TCS on the purchase of goods will also be eliminated from April 1, 2025.
• Higher TDS rates will continue to apply to taxpayers who do not provide their PAN details.

Conclusion

The latest changes in the TDS framework for FY 2024-25 (AY 2025-26) are aimed at simplifying tax compliance and reducing financial burdens for taxpayers. The higher exemption thresholds will particularly benefit senior citizens, small taxpayers, and individuals earning income through dividends, rent, and commissions. These revisions reflect the government’s intent to make taxation more transparent and taxpayer-friendly while ensuring better tax compliance across sectors.

Taxpayers should stay informed about these updates to optimize their tax planning and avoid unnecessary deductions. For detailed tax implications and compliance, consulting a tax professional is always advisable.