The Union Budget 2025 has brought some significant updates for savers, especially when it comes to TDS (Tax Deducted at Source) on bank deposits. If you've ever been surprised by a tax deduction on your interest income, this is good news. With higher exemption limits and simpler rules, it's now easier to grow your savings without unexpected cuts.
Let’s take a closer look at what these changes are, and how you can take advantage of them with your savings.
Important TDS Changes Effective from April 1, 2025
Starting April 1, 2025, you won’t have to worry about TDS being cut on smaller deposit amounts. Budget 2025 has raised the limits, making it easier to save without dealing with tax deductions on lower amounts. The increased TDS exemption limits will encourage more people to invest in bank deposits, as they can now retain a larger portion of their interest income, boosting bank deposit growth.
Here are some major highlights of the new TDS amendments:
- New TDS Limit for Regular Depositors
The government has raised the TDS exemption limit for non-senior citizens from Rs. 40,000/- to Rs. 50,000/-. This means TDS will only be deducted when your interest income from bank deposits exceeds Rs. 50,000/- annually, allowing more people to keep their interest earnings without tax cuts.
- Extra TDS Benefits for Senior Citizens
Senior citizens will now enjoy a higher TDS exemption on interest earned from fixed and recurring deposits. The threshold has been raised from Rs. 50,000/- to Rs 1 lakh per year. TDS will only be deducted if earnings exceed Rs 1 lakh, letting seniors keep more of their interest income.
Investing in SIB’s Fixed Deposits provides safe, reliable returns with attractive interest rates. With minimal risk and flexible maturity options, they are an ideal choice for anyone seeking consistent, long-term growth, including senior citizens.
- TDS Exemption Raised on Investment Income
The TDS exemption limit for dividend and mutual fund income will be raised to Rs. 10,000/- starting April 2025. This means TDS will only be deducted when your total earnings exceed Rs. 10,000/- per year, making tax deductions less frequent.
- Greater TDS Exemption on Rental Income
Landlords will see a substantial increase in TDS exemption for rental income. Starting now, TDS will apply only if annual rental earnings exceed Rs. 6 lakh, up from the earlier annual threshold of Rs. 2.4 lakh, offering greater relief.
These TDS changes are a win-win for savers, allowing them to retain more of their hard-earned interest. With its flexible terms and competitive interest rates, South Indian Bank’s fixed deposits complement the new TDS benefits, making it the ideal place to maximize savings confidently.
ALSO READ: 8 Reasons to Choose QuickFD for Your Financial Needs
Disclaimer: The article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of The South Indian Bank Ltd. or its employees. The South Indian Bank Ltd and/or the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial/non-financial decisions based on the contents and information’s in the blog article. Please consult your financial advisor or the respective field expert before making any decisions.