Making a big announcement in the budget, Finance Minister Nirmala Sitharaman said that now the limit of tax deduction at source (TDS) for senior citizens has been increased from Rs 50 thousand to Rs 1 lakh. This means that if a senior citizen earns Rs 1 lakh only from interest from bank deposit or FD during a financial year, then it will not come under the purview of TDS deduction.
TDS limit increased: In the budget, Finance Minister Nirmala Sitharaman has given a big gift to the middle class. She announced a big exemption in income tax, under which now there will be no tax on annual income up to Rs 12 lakh. Apart from this, the Finance Minister made another big announcement during Budget 2025. She has increased the limit of TDS deduction for senior citizens, due to which senior citizens investing in FD will get more benefit. Along with this, the liquidity of the bank will also increase.
What is the limit of TDS deduction now?
Making a big announcement in the budget, Finance Minister Nirmala Sitharaman said that now the limit of Tax Deduction at Source (TDS) for senior citizens has been increased from Rs 50 thousand to Rs 1 lakh. This means that if a senior citizen earns Rs 1 lakh only from interest from bank deposit or FD during a financial year, then it will not come under the purview of TDS deduction.
Till now there was no TDS up to Rs 50 thousand
This decision of the government will benefit retired people a lot. Such people depend largely on interest income from bank deposits for expenses. Till now, senior citizens’ interest income up to Rs 50,000 from bank deposits was not under the purview of TDS. They used to get this facility under section 80TTB of the Income Tax Act.
But now, after the announcement by Finance Minister Nirmala Sitharaman, this limit of Rs 50,000 has become Rs 1 lakh. This means that interest up to Rs 1 lakh received by senior citizens from bank deposits in a financial year will not come under the purview of TDS.
How to save more money?
After the announcement by Finance Minister Nirmala Sitharaman, now if any senior citizen gets interest up to Rs 1 lakh on deposits in a bank or post office during a financial year, then ‘0’ TDS will be deducted. Earlier, 10 percent tax was levied on interest income of more than Rs 50,000 from a bank or post office. On the other hand, senior citizens who do not have a PAN had to pay 20 percent TDS.
TDS limit on rent income also increased
Apart from this, the Finance Minister said that if there is income from rent, then no TDS charge will have to be paid on income up to Rs 6 lakh during a financial year. Earlier this limit was Rs 2.40 lakh, which has now been increased to Rs 6 lakh.
