Union Budget 2025: Rent Payment TDS Limit Increased To ₹6 Lakh; No TCS On Study Abroad Remittances

Union Budget 2025: In her Budget 2025 speech, Finance Minister Nirmala Sitharaman proposed streamlining tax deduction at source (TDS) by reducing the number of rates and thresholds that determine when TDS is deducted.

She introduced several important reforms covering rent payments, remittances, higher education, the sale of goods, and the decriminalisation of offences.

For senior citizens, the tax deduction limit on interest income has been raised from ₹50,000 to ₹1 lakh, reported the Mint.

On rent payments, the annual TDS limit has been increased from ₹2.4 lakh to ₹6 lakh.

This change means that tenants who were previously required to deduct TDS on rent payments of ₹20,000 a month will now only need to do so for rents exceeding ₹50,000 per month.

This aims to reduce the number of transactions subject to TDS, benefiting small taxpayers receiving modest payments.

For remittances, the threshold for tax collection at source under the RBI's Liberalised Remittance Scheme (LRS) has been raised from ₹7 lakh to ₹10 lakh.

Regarding higher education, no tax collection at source (TCS) will apply to remittances for educational expenses paid through loans from banks.

Higher TDS will only apply in cases where the individual does not provide a Permanent Account Number (PAN).

In the sale of goods sector, where both TDS and TCS currently apply, TCS will be removed.

Lastly, in a move to reduce penalties, the delay in TDS payments up to the due date for filing statements was decriminalised in July 2024.

This relaxation has now been extended to TCS provisions as well.