[Analysis] Union Budget 2025 | TDS/TCS Amendments in Finance Bill 2025

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  • Last Updated on 3 February, 2025

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TDS/TCS Amendments in Budget 2025

The Finance Bill 2025 introduced key amendments to the TDS/TCS framework aimed at simplifying compliance and boosting ease of doing business. Notably, the TDS rate under Section 194LBC for income payable by a securitisation trust is reduced from 25%/30% to 10%. Additionally, the bill raises the threshold limits for TDS applicability across various sections—covering areas such as interest on securities, dividend payments, and professional fees—thereby easing the tax burden on individuals and businesses.

The Finance Minister, Smt. Nirmala Sitharaman presented the Union Budget 2025 in parliament today, i.e., February 01, 2025. The finance minister has also tabled the Finance Bill 2025, which has proposed various amendments to the tax and corporate laws.

To enhance the ease of doing business and promote better taxpayer compliance, the Finance Bill 2025 has proposed rationalising a few TDS/TCS rates and raising the threshold for TDS applicability.

The TDS rate under Section 194LBC on income payable by a securitisation trust is proposed to be reduced from 25%/30% to 10%, as the sector is well-regulated.

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Changes in the threshold limit under various sections have been given below:

S. No. Section Nature of Income Current Threshold Proposed Threshold
1. 193 Interest on Securities Nil Rs. 10,000
Interest payable to resident individual/HUF on any debenture issued by a public company Rs. 5,000 Rs. 10,000
2. 194 Dividend Rs. 5,000 Rs. 10,000
3. 194A

 

 Interest other than interest on Securities
  • Rs. 50,000 for senior citizens
  • Rs. 40,000 in case of others when the payer is a bank, cooperative society and post office
  • Rs. 5,000 in other cases.
  • Rs. 1,00,000 for senior citizen
  • Rs. 50,000 in case of others when the payer is a bank cooperative society and post office
  • Rs. 10,000 in other cases
4. 194B Winning from Lotteries, Crossword Puzzles, gambling, betting, etc. (except online games Aggregate of amounts exceeding Rs. 10,000 during the financial year Rs. 10,000  in respect of a single transaction
5. 194BB

 

 Winnings from horse race
6. 194D Insurance Commission Rs. 15,000 Rs. 20,000
7. 194G Commission and other payments on the sale of lottery tickets Rs. 15,000 Rs. 20,000
8. 194H Commission and Brokerage Rs. 15,000 Rs. 20,000
9. 194-I Rent Rs. 2,40,000  during the financial year Rs. 50,000  per month or part of a month
10. 194J Royalty and Fees for Professional or Technical Services Rs. 30,000 Rs. 50,000
11. 194K Income in respect of units of mutual fund Rs. 5,000 Rs. 10,000
12. 194LA Compensation on account of compulsory acquisition of an immovable property (other than agricultural land) Rs. 2,50,000 5,00,000

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