The Union Finance Minister Nirmala Sitharaman presented a record 8th consecutive Union Budget by which the FM proposed TDS Or TCS rationalization for easing difficulties, but higher TDS applicable for non-PAN holders.
The FM proposed to rationalize 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. The limit for tax deduction on interest for senior citizens is being doubled from the present Rs. 50,000 to Rs. 1 lakh. Similarly, the annual limit of Rs. 2.40 lakh for TDS on rent is being increased to ` 6 lakh. This will reduce the number of transactions liable to TDS, thus benefiting small taxpayers receiving small payments.
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. It was also proposed to remove TCS on remittances for education purposes, where such remittance is out of a loan taken from a specified financial institution.
Both TDS and TCS are being applied on any transaction relating to sale of goods. To prevent such compliance difficulties, the FM proposed to omit the TCS.
The Finance Minister proposed that the provisions of the higher TDS deduction will now apply only in non-PAN cases.
In July 2024, the delay for payment of TDS up to the due date of filing statement was decriminalized and proposed to provide the same relaxation to TCS provisions as well.
Official Copy Of Budget Documents
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