Union Finance Minister Nirmala Sitharaman presented the Union Budget 2025 in the Lok Sabha at 11 AM, marking her eighth consecutive budget announcement. The Finance Minister has announced that TDS rates will be streamlined in the Budget 2025, providing significant relief to taxpayers. The tax deduction limit on interest for senior citizens is set to double from Rs 50,000 to Rs 1 lakh. Additionally, the TDS threshold on rent will increase to Rs 6 lakh.
To simplify the tax deduction process, the government is reducing the number of TDS rates and adjusting the thresholds for deductions.
Effective October 1, 2024, employers must account for TDS/TCS deducted on non-salary income when computing TDS on salaries. This adjustment will help salaried employees lower their TDS liability by offsetting taxes already deducted on non-salary income. While the rule was implemented earlier, necessary backend technical updates delayed its full execution.
Key amendments to TDS forms 24Q, 26Q and 27EQ
New Column 388A in Form 24Q
A new column (388A) has been introduced under Annexure II (Salary details) for statements from FY 2024-25 Q4 onwards. This column will reflect amounts reported under Section 192(2B) for TDS/TCS deductions other than those shown in Column 388. Column 388 records tax deducted by other employers on income included in the total taxable amount (Column 339).
Increase in Standard Deduction
Under the new tax regime, the standard deduction has been raised from Rs 50,000 to Rs 75,000. This revision applies to Annexures II and III of Form 24Q for statements from FY 2024-25 Q4 onwards.
Modification of Column Names and Numbers
Certain columns in Annexure II (Salary details) of Form 24Q have undergone changes in their names and numbers, effective from FY 2024-25 Q4 onwards.
Omission of Section Code 194F
Section code 194F has been removed from Form 26Q, effective from FY 2024-25 Q3 onwards.
These updates aim to improve tax compliance, ease the tax burden, and enhance clarity in tax deductions.