1. Section 194D – Payment related to Insurance Commission
The TDS @2% would apply on Section 194D – Payment related to Insurance Commission, till 31st March this was 5%. The Threshold amount is now ₹ 20,000/- (earlier it was ₹ 15,000/-)
2. Introduction of TDS on payment to Partners towards Salary, Bonus, etc.
A new Section 194T has been introduced for TDS @10% for payments made to Partners towards Salary, Bonus, Incentives, etc.
3. Correction Statements – limited to the previous six years only
As per the current provisions, one can file correction statements for any period as many times with practically no restrictions. It is now proposed that no correction statement can be filed after six years on completion of the financial year. This is applicable w.e.f. 1st April ’25. It implies that during the period Apr’25 to Mar’26, correction statements for FY:2019-20 onwards will only be allowed. Correction related to Q4 is also permitted for seven years.
Correction Statements: Limited to the Last Six Years
Circular from TIN – Correction Statement
4. For delayed deposit of TCS, increase in interest rates
Interest u/s 206(7) on delayed deposit of TCS is currently 1% per month of part thereof from the date of collection of tax. This rate will now be increased to 1.5% w.e.f. 1st April ’25.
5. Increase in TDS / TCS threshold limits
The threshold limit applicable for TDS & TCS has been revised for some sections which is summarized below:
| Category | TDS/TCS Section | Previous Rate/Limit | New Rate/Limit |
| Interest on Securities | 193 | Nil | ₹ 10,000 |
| Interest Income (Senior Citizens) | 194A | ₹ 50,000 | ₹ 1,00,000 |
| Interest Income (Others) | 194A | ₹ 40,000 (banks) | ₹ 50,000 (banks) |
| Interest Income (Other Cases) | 194A | ₹ 5,000 | ₹ 10,000 |
| Dividend for Individuals | 194 | ₹ 5,000 | ₹ 10,000 |
| Mutual Fund Income | 194K | ₹ 5,000 | ₹ 10,000 |
| Lottery Winnings | 194B | Aggregate > ₹ 10,000 | ₹ 10,000 per transaction |
| Winnings from Horse Races | 194BB | ₹ 10,000 | ₹ 10,000 |
| Insurance Commission | 194D | ₹ 15,000 | ₹ 20,000 |
| Lottery Ticket Commission | 194G | ₹ 15,000 | ₹ 20,000 |
| Brokerage & Commission | 194H | ₹ 15,000 | ₹ 20,000 |
| Rent Payments | 194I | ₹ 2.4 lakh/year | ₹ 50,000 per month |
| Professional / Technical Fees | 194J | ₹ 30,000 | ₹ 50,000 |
| Enhanced Compensation Income | 194LA | ₹ 2,50,000 | ₹ 5,00,000 |
| TCS on Foreign Remittances | 206C(1G) | ₹ 7 lakh | ₹ 10 lakh |
| TCS on Education Remittances | 206C(1G) | 5% | Removed |
| Higher TDS for Non-PAN Cases | Various | Applied broadly | Only for Non-PAN holders |
| TCS Payment Delays | 206C | Strict penalties | Relaxed rules |
| TCS on Sale of Goods | 206C | Applied in some cases | Removed |
6. Amendment in the penal provision related to TDS – Section 271H
Presently, sub-section (3) of section 271H allows filing of TDS / TCS Return within one year from the due date as specified. To facilitate better compliance, it is proposed to modify this one-year period to one month. It implies that TDS / TCS return must be filed latest within one month from the date it falls due to avoid penal action.
7. Removal of TCS on Sale of Goods
Section 206C(1H): Previously, both TDS under Section 194Q and TCS under Section 206C(1H) applied to certain transactions.
The Budget removes TCS on the Sale of Goods, preventing double taxation.
8. Changes in TCS Provisions
Liberalized Remittance Scheme (Section 206C(1G)):
- Previous Limit: ₹ 7 Lakh
- New Limit: ₹ 10 Lakh
Education Remittances (Section 206C(1G)):
TCS has been completely removed for education-related remittances when funded by a loan from a recognized financial institution.
9. Removal of Higher TDS / TCS Rates for Non-Filers
Previously, non-filers of income tax returns were subject to higher TDS and TCS rates under Section 206AB & 206CCA
10. Compliance Simplifications & Decriminalization
The Budget has introduced measures to ease compliance for taxpayers:
TDS Delays: As of July 2024, delays in TDS payments up to the due date of filing returns have been decriminalized.
TCS Delays: The same relaxation has now been extended to TCS provisions.
Whether above provisions need approval of Parliament & President and whether it needs approval ?
Most of the announcements were made in the Union Budget of 2024-25 which was effective from 1st April, 2025. These have been passed in the Parliament and incorporated in the Act. A few has been announced in the Union Budget of 2025-26 (almost all are some kind of relief), which is still pending in the Parliament and expected to be cleared with April ’25.