Synopsis: The Union Budget 2025 introduced several tax reforms aimed at providing significant relief to senior citizens, particularly those investing in fixed deposits and receiving rental income. Key changes include an increase in the Tax Deducted at Source (TDS) threshold on interest income from fixed deposits and an enhancement in the TDS exemption limit on rental income.
In a move to ease the financial burden on senior citizens, the Budget 2025 raised the TDS exemption limit on interest income from fixed deposits.
Previously set at ₹50,000, the new threshold is now ₹1 lakh.
This means that banks will deduct TDS on interest income exceeding ₹1 lakh in a financial year, providing senior citizens with greater disposable income and reducing the need for tax filing in many cases.
Enhanced TDS Exemption on Rental Income:
The Budget also increased the annual TDS exemption limit on rental income from ₹2.40 lakh to ₹6 lakh.
This change benefits senior citizens who rely on rental income during retirement, as tenants will no longer be required to deduct TDS on rent payments up to ₹6 lakh per annum.
This adjustment simplifies compliance and improves cash flow for property owners.
Revised Tax Slabs for Senior Citizens:
Under the new tax regime, the income tax slabs for senior citizens have been revised as follows:
- Income up to ₹3 lakh: Nil
- ₹3 lakh to ₹5 lakh: 5%
- ₹5 lakh to ₹10 lakh: 20%
- Above ₹10 lakh: 30%
These changes aim to reduce the tax burden on senior citizens, allowing them to retain a larger portion of their income.
Conclusion:
The Union Budget 2025 introduces several tax reforms that offer substantial relief to senior citizens, particularly those investing in fixed deposits and receiving rental income.
The increase in TDS exemption limits and the revision of tax slabs are expected to enhance financial security and simplify tax compliance for the elderly population.
Disclaimer: The information provided in this article is for general informational purposes only and should not be construed as financial or tax advice. Readers are advised to consult with a qualified financial advisor or tax professional to understand how these changes may apply to their individual circumstances.
