5 New TDS Rules From 1 April 2025: Check Rules For Senior Citizens, General Citizens And Others

Significant changes to the Tax Deducted at Source (TDS) regulations were made in the Union Budget 2025 to streamline the tax system and lower compliance urdens, particularly for senior citizens and investors. Below is a summary of the changes that will take effect on April 1, 2025.

For senior citizens, the TDS threshold has been raised from Rs 50,000 to Rs 1 lakh. This will allow them to earn up to Rs 1 lakh in interest income from fixed deposits and recurring deposits without immediate tax deductions, thus reducing their financial burden.

The TDS threshold for interest income for general citizens has been increased from Rs 40,000 to Rs 50,000 per financial year. The banks will now deduct TDS only if the aggregate annual interest exceeds Rs 50,000. This will reduce the tax burden on depositors, especially those relying on FDs and RDs.

The TDS threshold for insurance commission has been increased from Rs 15,000 to Rs 20,000. Insurance agents and brokers will now have TDS deductions on their commission income only if it exceeds Rs 20,000 in a financial year, up from the previous threshold of Rs 15,000. 

The annual dividend TDS exemption threshold has been increased from Rs 5,000 to Rs 10,000. Dividend income from stocks or mutual funds will now only be subject to TDS deduction if the total income from a single mutual fund or company in a given fiscal year surpasses Rs 10,000.

The TDS rules for winnings from lotteries, crossword puzzles, and horse races have been revised. TDS will now be deducted on a per-transaction basis, applying only when a single transaction exceeds Rs 10,000. TDS was earlier deducted when the aggregate winnings from these sources exceeded Rs 10,000 in a financial year. But now, TDS will be deducted only when a single transaction exceeds Rs 10,000.