New Delhi: Finance Minister Nirmala Sitharaman Friday proposed to double the limit for TDS on interest income for senior citizens to Rs 1 lakh, and also increase the threshold to Rs 6 lakh on rent from the current Rs 2.4 lakh.
In her Budget speech in the Lok Sabha, the minister proposed to rationalise Tax Deduction at Source (TDS) by reducing the number of rates and thresholds above which TDS is deducted.
Further, threshold amounts for tax deduction will be increased for better clarity and uniformity, she added.
“The limit for tax deduction on interest for senior citizens is being doubled from the present Rs 50,000 to Rs 1 lakh,” she said.
For others, the limit for TDS has been increased to Rs 50,000 from the current Rs 40,000.
Similarly, the annual limit of Rs 2.40 lakh for TDS on rent is being increased to Rs 6 lakh. This will reduce the number of transactions liable to TDS, thus benefitting small taxpayers receiving small payments.
Sitharaman also announced that the threshold to collect tax at source (TCS) on remittances under RBI’s Liberalized Remittance Scheme (LRS) is proposed to be increased from Rs 7 lakh to Rs 10 lakh.
“I also propose to remove TCS on remittances for education purposes, where such remittance is out of a loan taken from a specified financial institution,” Sitharaman said.
Currently, both TDS and TCS are being applied on any transaction relating to the sale of goods.
To prevent such compliance difficulties, Sitharaman proposed to omit the TCS.
TDS is applicable to deductions from payments made for goods and services, while TCS is the tax that sellers collect from buyers at the time of sale.
PTI
