The New TDS 5 Rules April 2025 announced in the Union Budget 2025 bring several important updates aimed at easing the tax burden for individuals and improving cash flow management. These changes affect various segments of taxpayers, including senior citizens, salaried individuals, commission earners, and small investors. Here’s everything you need to know.
1. New TDS 5 Rules April 2025: Higher Exemption for Senior Citizens
Under the New TDS 5 Rules April 2025, senior citizens enjoy a major relief:
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New Threshold: TDS on interest income will now apply only if it exceeds Rs 1 lakh per financial year.
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Earlier Threshold: Rs 50,000
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This move ensures better liquidity and lower paperwork for retirees relying on interest from FDs and RDs.
2. TDS Relief for General Taxpayers
Another update under the New TDS 5 Rules April 2025 benefits non-senior citizens:
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Updated Limit: Rs 50,000/year (previously Rs 40,000)
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Effective Date: April 1, 2025
Taxpayers earning modest interest income now face fewer TDS deductions, reducing refund hassles.
3. New TDS 5 Rules April 2025: Changes in Rent-Related TDS
The rules on rent payments have been simplified:
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Monthly Threshold: TDS is now applicable if rent is Rs 50,000 or more per month.
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Earlier Rule: Annual rent exceeding Rs 2.4 lakh triggered TDS.
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TDS Rate: Reduced from 5% to 2% under Section 194IB.
This update under the New TDS 5 Rules April 2025 eases compliance for salaried tenants and small landlords alike.
4. Section 194I Rent TDS Rules for Businesses
For businesses and audited individuals:
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New Threshold: Rs 6 lakh per year or Rs 50,000 per month
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TDS Rates:
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2% for plant and machinery
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10% for land, buildings, and furniture
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These changes are part of the broader framework of the New TDS 5 Rules April 2025 to ensure fair and streamlined tax collection.
5. Dividend & Mutual Fund TDS Limit Increased
As per the New TDS 5 Rules April 2025, dividend income limits have also been revised:
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Old Limit: Rs 5,000
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New Limit: Rs 10,000 annually
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TDS is now deducted only if your total dividend income exceeds Rs 10,000 per year.
This benefits small investors and helps increase take-home income.
6. Commission Income Threshold Increased
Professionals earning commissions will see reduced TDS deductions:
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Old Limit: Rs 15,000
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New Limit: Rs 20,000
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Effective from April 1, 2025
The New TDS 5 Rules April 2025 aim to support agents and brokers by improving post-tax earnings and simplifying tax filing.
Benefits of the New TDS 5 Rules April 2025
These updated rules are designed to:
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Increase liquidity for small and mid-level earners
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Reduce excessive tax deductions
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Lower the burden of filing refund claims
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Simplify compliance for senior citizens, investors, tenants, and professionals
Pro Tax Tip:
Even if your income is below the threshold, submit Form 15G or 15H to avoid unnecessary deductions under the New TDS 5 Rules April 2025.
