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SUMMARY
The new Tax Deducted at Source (TDS) rules announced in Budget 2025 will take effect from April 1, 2025. The changes aim to provide relief to investors and senior citizens. Here’s a breakdown of the key updates.
1 / 5Higher TDS exemption for mutual fund and stock investors | Investors will see an increase in the TDS exemption threshold on dividends and mutual fund (MF) earnings. From April 1, 2025, TDS will be deducted only if the total dividend income or MF earnings exceed ₹10,000 in a financial year. Previously, the exemption limit was ₹5,000.
2 / 5Higher TDS threshold for senior citizens | Senior citizens will benefit from a higher exemption limit on interest income from fixed deposits (FDs) and recurring deposits (RDs). The TDS threshold has been doubled from ₹50,000 to ₹1 lakh per financial year. This means banks will deduct TDS only if total interest earnings exceed ₹1 lakh.
3 / 5TDS exemption increase for other depositors | For individuals below 60 years of age, the TDS threshold on interest income from FDs and RDs has been raised from ₹40,000 to ₹50,000. Banks will only deduct TDS if interest earnings surpass this limit.
4 / 5Higher TDS exemption for insurance agents and brokers | Insurance agents and brokers will benefit from an increased TDS exemption on commissions. The threshold has been raised from ₹15,000 to ₹20,000 per financial year, improving cash flow and reducing compliance burdens.
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