- Reduction in compliance burden by omission of TCS on sale of specified goods
Starting from April 1, 2025, the requirement under section 206C(1H) for sellers to collect tax at source (TCS) on the sale of specified goods exceeding Rs 50 lakhs will be discontinued. This change addresses concerns about the dual compliance burden, where sellers were required to ensure buyers deducted tax under section 194Q (TDS), leading to both TDS and TCS being applicable on the same transaction.
- Section 194-I – Rent
Section 194-I of the Income Tax Act currently requires tax deduction at source (TDS) on rental income exceeding Rs. 2,40,000 in a financial year. Now as per the proposed amendment the threshold for TDS is Rs. 50,000 per month or part of the month, effective from April 1, 2025.
- Removal of higher TDS/TCS for non-filers of return of income
The current provisions under Sections 206AB and 206CCA enforce higher tax rates for non-filers of income tax returns, causing difficulties for tax deductors and collectors who face challenges verifying the filing status of individuals. To address these concerns, the proposal is to repeal these sections, with the change coming into effect on April 1, 2025.
- Other Important changes applicable from 1st April 2025
| S. No | Section | Current Threshold | Proposed Threshold |
| 1 | 193 – Interest on securities | Nil | Rs. 10,000 |
| 2 | 194A – Interest (other than securities) | Senior Citizen: Rs. 50,000 | Senior Citizen: Rs. 1,00,000 |
| Others: Rs. 40,000 (bank/cooperative society/post office) | Others: Rs. 50,000 (bank/cooperative society/post office) | ||
| Others: Rs. 5,000 | Others: Rs. 10,000 | ||
| 3 | 194 – Dividend for individual shareholders | Rs. 5,000 | Rs. 10,000 |
| 4 | 194K – Mutual Fund or Specified Company Income | Rs. 5,000 | Rs. 10,000 |
| 5 | 194B – Winnings from lottery, crossword puzzles, etc. | Exceeding Rs. 10,000 in the year | Rs. 10,000 per transaction |
| 6 | 194BB – Winnings from horse races | Not provided | Not provided |
| 7 | 194D – Insurance Commission | Rs. 15,000 | Rs. 20,000 |
| 8 | 194G – Commission on lottery tickets | Rs. 15,000 | Rs. 20,000 |
| 9 | 194H – Commission or Brokerage | Rs. 15,000 | Rs. 20,000 |
| 10 | 194-I – Rent | Rs. 2,40,000 per year | Rs. 50,000 per month or part of a month |
| 11 | 194J – Professional or Technical Fees | Rs. 30,000 | Rs. 50,000 |
| 12 | 194LA – Enhanced Compensation Income | Rs. 2,50,000 | Rs. 5,00,000 |
| 13 | 194T- Payment to Partners | Nil | Rs. 20,000 TDS@ 10% |
