Higher TDS Thresholds to Ease Taxpayer Burden: Budget Unveiled

The government has proposed increasing the annual threshold for tax deduction at source (TDS) on rent from Rs 2.4 lakh to Rs 6 lakh. The move, highlighted in Finance Minister Nirmala Sitharaman's Budget speech, aims to benefit smaller taxpayers with fewer TDS-eligible transactions and enhance clarity.

The government has put forth a proposal to lift the annual threshold for Tax Deduction at Source (TDS) on rent from Rs 2.4 lakh to a more substantial Rs 6 lakh. This initiative aims to decrease the number of transactions subject to TDS.

In her Budget speech, Finance Minister Nirmala Sitharaman emphasized the plan to streamline TDS by limiting the number of rates and raising threshold limits for enhanced clarity and consistency. The new cut-off is intended to benefit smaller taxpayers who receive minor payments.

According to the Budget documents, the amendment affects Section 194-I of the Income Tax Act, which outlines requirements for individuals responsible for paying rent. The revised threshold will now be Rs 50,000 per month or part thereof, a change from the previously set Rs 2.4 lakh annually.