Starting from April 1, 2024, with the new financial year (FY 2024-25), there will be some important changes to the tax system in India. These changes were announced by Finance Minister Nirmala Sitharaman in the Union Budget 2024. The new Tax Deducted at Source (TDS) rules will affect senior citizens, investors, and people who earn commissions. The goal of these changes is to make it easier for people by reducing their tax burden and increasing their disposable income.
One big change is for senior citizens. From April 1, 2025, senior citizens will not have to pay TDS on interest income up to Rs 1 lakh from Fixed Deposits, Recurring Deposits, and similar accounts. If their income exceeds Rs 1 lakh in a year, TDS will be deducted. This is good news for senior citizens who rely on interest income to support themselves.
Changes In Tax Rules For Interest Income And Gaming Winnings
The tax rules have been updated to make things simpler.
- Interest Income: The threshold for TDS (Tax Deducted at Source) on interest income has been raised from Rs 40,000 to Rs 50,000. This means banks will only take TDS if your interest income is more than Rs 50,000 in a year. This change will benefit people who earn moderate income from their bank deposits.
- Gaming Winnings: The TDS rule for gaming winnings has also been simplified. Now, TDS will only be deducted if your winnings exceed Rs 10,000. Previously, winnings were added up and TDS was deducted if the total crossed Rs 10,000. Now, even if you win Rs 8,000 several times, no TDS will be deducted unless your total winnings are more than Rs 10,000.
New TDS Rules For Commission Earners And Investors
- Commission Earners: Insurance agents will now benefit from a higher TDS threshold. The limit has been raised from Rs 15,000 to Rs 20,000, which means TDS will only be deducted if their earnings exceed Rs 20,000.
- Investors: People who earn dividends from mutual funds and equities will also see a higher tax exemption. The exemption limit has been increased from Rs 5,000 to Rs 10,000, meaning TDS will only be deducted if the dividends go beyond Rs 10,000.
These changes aim to reduce the tax burden on individuals and make the tax process simpler and more transparent. The new TDS rules, which will start next year, will make it easier for taxpayers to comply with the system and enjoy more benefits.
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