Indian Finance Minister Nirmala Sitharaman on Saturday (Feb 1) announced measures to rationalise TDS to ease the compliance burden of Indian citizens.
Presenting her 8th consecutive budget under the Narendra Modi government, Sitharaman said the tax proposals for the financial year 2025-26 are guided by income tax reforms for the middle class, TDS rationalisation and easing the compliance burden.
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TDS proposals in Budget 2025-26
Sitharaman on Saturday announced the rationalisation of the TDS (Tax Deduction at Source) regime to ease the compliance burden. She proposed a major relief for the middle class in India with the exemption of TCS (tax collected at source) for remittances for education purposes in cases where education loan is taken from specified financial institutions.
Meanwhile, for senior citizens, the limit for tax deduction on interest income would be doubled to Rs 1 lakh. Meanwhile, the limit for TDS on rent is proposed to be increased to Rs 6 lakh from the ₹2.40 lakh limit previously.
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The government will also increase the limit of TCS on remittances under RBI's liberalised remittance scheme from Rs 7 lakh to Rs 10 lakh. Besides, the budget extends the period of incorporation by five years for startups to avail of tax benefits.
Reforms are not destinations but means to achieve good governance for the people and economy, said the Indian finance minister, adding that the new I-T bill will be half of the current volume, clear and direct in wording.
(With inputs from agencies)