Significant Changes In TDS & TCS Rules Starting From April 1st

Changes In TDS & TCS Rules

The central government through the budget announced several key changes in the existing tax system, specifically in the rules of Tax Deducted at Source (TDS) and Tax Collected at Source (TCS). The changes are being introduced with just one aim and that is to make the taxation system fair for all, individuals and traders.

All the changes in the rules of TDS and TCS are described below in detail for one’s better understanding and reference.

1. New Limits Of TDS

In the old system, TDS was deducted from people’s accounts when they reached a certain bar of cash inflow due to a variety of reasons like interest earned from the bank. However, this year’s budget has proposed to eliminate this bar. This would be very beneficial for people as a chunk of their income won’t be deducted whenever they earn.

2. Sending Money Abroad

Earlier, people were required to pay TCS if they wanted to transfer more than 7 lakh Rupees to someone’s account abroad. In the new system, this limit has been proposed to be increased to 10 lakh Rupees. Also, if the money is being set for educational purposes, no TCS will be charged.

3. TCS On Sales Of More Than 50 Lakh Rupees

Under the new system, if traders or businessmen make a sale of more than 50 lakh Rupees, no TCS will be deducted from their incomes.

4. Tax Returns

In the old system, a higher percentage of TDS and TCS were deducted if an individual failed to file their Income Tax Return (ITR) on time however as per the new system, this will be eliminated to save people from paying higher tax rates.

5. Delays In Paying TCS

Earlier, people who failed to pay TCS to the government on time were sentenced to imprisonment for a period of 3 to 7 months along with a fine. However, under Budget 2025, this is being changed to no legal action if the person pays within the stipulated time.