#Modinomics2025: Major TDS And TCS Reforms For Taxpayers!

In the Budget 2025, to simplify the tax system, Finance Minister Nirmala Sitharaman has proposed several reforms to the Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) systems. The government will rationalize TDS rates by reducing the number of rates and raising the threshold amounts, bringing greater clarity and uniformity. For senior citizens, the TDS limit on interest income will be doubled from ₹50,000 to ₹1 lakh. The TDS limit for rent payments will also be raised from ₹2.40 lakh to ₹6 lakh annually, benefiting small taxpayers. Additionally, the TCS on remittances under the RBI's liberalized remittance scheme (LRS) will be increased from ₹7 lakh to ₹10 lakh. The proposal also includes the removal of TCS on remittances for education when funded by loans from specified financial institutions, further easing the financial burden on students. These changes aim to reduce the number of TDS transactions and promote greater tax compliance across the country.