Finance Minister Nirmala Sitharaman announced the Union Budget for the financial year 2025-26 on February 1. This marks her eighth time presenting the country’s budget, which includes 2 interim budgets and 6 full budgets. Farmers and middle-class individuals have received significant relief in today’s budget. The government announced that no tax will be levied on annual income up to Rs 12 lakh, bringing joy to the employed population. Additionally, the Finance Minister has increased the TDS (Tax Deducted at Source) limit on income from interest earned on bank fixed deposits.

Know the New Limit

Finance Minister Nirmala Sitharaman has increased the TDS deduction limit on interest income from bank FDs from Rs 40,000 to Rs 50,000 per year. This change will take effect from the next financial year, starting April 1, 2025. It’s important to note that only non-senior citizens, i.e., common people, will benefit from this new limit.

What is TDS Deduction?

Banks or financial institutions must deduct TDS if the interest paid to an account holder in a financial year exceeds the prescribed limit. This limit differs for senior citizens and non-senior citizens. Currently, banks are required to deduct TDS at a rate of 10% on FD interest, but this applies only if the account holder has provided their PAN.

TDS Deduction Limit on Rent Also Increased

In addition, the government has raised the TDS deduction limit on rent. The Finance Minister announced that the annual TDS limit on rent is being increased from Rs 2.40 lakh to Rs 6 lakh. As a result, property owners will only need to pay TDS on rental income exceeding Rs 6 lakh, which brings significant relief to them.