Union Budget 2025: Tax Deduction Limits Revised for Senior Citizens and Renters

Team Finance Saathi

01/Feb/2025

What's covered under the Article:

TDS limit for senior citizens doubled from ₹50,000 to ₹1 lakh, providing more relief.
Annual TDS limit on rent increased from ₹2.4 lakh to ₹6 lakh, benefiting renters.
The TCS threshold for remittances under the RBI's Liberalized Remittance Scheme raised, along with exemptions for education loans.

The Union Budget for 2025-26, presented by Finance Minister Nirmala Sitharaman on February 1, 2025, has introduced several key revisions to the tax structure, with a special focus on providing relief to senior citizens and renters.

One of the major announcements is the doubling of the Tax Deducted at Source (TDS) limit on interest income for senior citizens. The revised limit has been increased from ₹50,000 to ₹1 lakh, allowing older individuals to benefit from a higher tax-free income on their savings. This change is expected to help those relying on interest income as a major source of their post-retirement earnings.

Another significant change targets renters. The annual TDS limit on rent payments has been raised from ₹2.4 lakh to ₹6 lakh, reducing the tax burden on individuals paying rent, especially those living in high-rent areas. This move is expected to benefit millions of tenants across India who were previously subject to tax deduction on rental income.

In addition to these changes, the Tax Collected at Source (TCS) threshold for remittances under the RBI's Liberalized Remittance Scheme (LRS) has been raised, making it easier for individuals to remit money abroad without facing high tax collection charges. Furthermore, there has been a notable exemption from TCS on education loan remittances, easing the financial burden on students seeking to study overseas.

These measures are seen as a part of the government's ongoing efforts to make the tax system more inclusive and taxpayer-friendly, while also boosting the financial independence of senior citizens and enhancing support for individuals undertaking educational ventures.

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Union Budget 2025: Tax Deduction Limits Revised for Senior Citizens and Renters

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