In the Union Budget 2025, Finance Minister Nirmala Sitharaman introduced several key reforms aimed at simplifying tax procedures, particularly for senior citizens and individuals with smaller incomes. One of the significant changes was an increase in the threshold for Tax Deducted at Source (TDS), aimed at reducing the compliance burden for taxpayers.
The TDS threshold on rent was raised substantially from Rs 2.40 lakh to Rs 6 lakh, easing the tax burden on landlords and tenants alike, particularly for those in smaller rental arrangements. Additionally, the TDS threshold for senior citizens was rationalized, increasing from Rs 50,000 to Rs 1,00,000. This move is expected to provide financial relief to the elderly by allowing them to retain more of their income without facing automatic tax deductions.
Sandeep Chilana, Managing Partner at CCLaw, praised the reforms, describing them as a positive step towards reducing the compliance burden for smaller businesses and individuals. He noted that raising the TDS threshold for rental income, professional fees, and other such payments would simplify the tax filing process for people with lower incomes or fewer financial transactions.
Chilana also pointed to the rationalization of TDS rates, which will streamline the various tax categories into fewer, more uniform slabs. This simplification is expected to reduce confusion and improve compliance across different sectors, making it easier for taxpayers to navigate the system and file taxes efficiently.
These changes in the Union Budget 2025 aim to ease financial strains on individuals and businesses while simplifying tax processes and promoting greater tax compliance.
