Don't ❌ Pay TDS/TCS before knowing these changes in TDS/TCS rules from April 2025

Summary

This video provides important updates on TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) provisions for the financial year 2025-26. The changes, effective from April 2025, include new categories of luxury goods subject to TCS, changes to the threshold for various TDS deductions, and the removal of certain provisions like TCS on sales. It also highlights important amendments such as the introduction of new limits for tax deductions on interest, dividends, and insurance commissions. Viewers are encouraged to review their accounts for these updates to avoid any errors and potential financial penalties.

Takeaways

• 😀 The new financial year 2025-26 has started, and TDS/TCS deposits are due by May 7th.
• 😀 Ensure your books of accounts are updated and cross-check TDS/TCS details to avoid mistakes that could lead to financial losses.
• 😀 A significant change took effect from April 2, 2025, adding more luxury goods to the TCS provision, such as watches, artworks, sports equipment, and luxury cars over ₹10 lakh.
• 😀 TCS on sales has been removed as of April 1, 2025. Now, no TCS is required for sales transactions under Section 2006C1H.
• 😀 The provision for higher TDS rates for non-filers and individuals without a PAN has been removed. TDS will now be deducted based solely on PAN availability.
• 😀 TCS is no longer applicable on foreign remittances for education loans above ₹7 lakh, as well as on timber and forest products under forest leases, with changes in the applicable rates.
• 😀 Several changes to TDS thresholds were introduced: the limit for interest income from banks has increased to ₹50,000, while the limit for other income sources is now ₹10,000.
• 😀 The TDS limit for dividends under Section 194D has increased from ₹5,000 to ₹10,000.
• 😀 For winnings under Section 194B, TDS will now apply on individual transactions exceeding ₹10,000 instead of aggregated winnings throughout the year.
• 😀 TDS rates for rental payments have changed, with thresholds set for monthly rent exceeding ₹50,000 for land and building, and ₹2,500 for plant and machinery.

Q & A

What is the deadline for depositing TDS for the financial year 2025-26?

The deadline for depositing TDS is the 7th of May 2025, as it must be deposited by the 7th of each month.

What significant changes have been made to TCS (Tax Collected at Source) starting from April 2, 2025?

Starting from April 2, 2025, luxury goods like expensive wristwatches, art pieces, antique paintings, yachts, helicopters, and certain accessories are now subject to TCS if their value exceeds 10 lakh rupees per item.

Which items have been added to the list of luxury goods under TCS regulations?

Items added to the list include wristwatches, antique paintings, collectible coins, stamps, yachts, helicopters, sunglasses, handbags, shoes, sports equipment, and home theater systems used for racing or polo.

What change has been made regarding TCS on sales transactions from April 1, 2025?

From April 1, 2025, TCS has been removed on sales transactions. This means no TCS will be collected on sales anymore, and only TCS on purchases will remain applicable.

What was the previous TCS rate for vehicle purchases above ₹10 lakh, and what change has been made?

Previously, TCS of 1% was applicable for vehicles worth above ₹10 lakh. The new changes also apply to other luxury items like expensive wristwatches and artwork.

How has the threshold for TDS deduction changed for interest income from banks?

For non-senior citizens, the TDS threshold for interest income from banks has been raised from ₹40,000 to ₹50,000. For senior citizens, the threshold has been increased to ₹1 lakh.

What changes have been made in the TDS deduction on dividend income under section 194?

The TDS threshold for dividend income under section 194 has been increased from ₹5,000 to ₹10,000. TDS will now be deducted only if the total dividend exceeds ₹10,000.

What modifications have been made in TDS on winnings from games or lotteries under section 194B?

The TDS on winnings from games, lotteries, or puzzles has been modified to a single transaction limit of ₹10,000. Previously, the threshold was ₹10,000 for the entire year.

What is the new threshold for TDS on insurance commissions under section 194D?

The new threshold for TDS on insurance commissions has been increased from ₹15,000 to ₹20,000, with a TDS rate of 5%.

How have the TDS provisions for professional fees under section 194J been updated?

Under section 194J, the threshold for professional fees has been updated to ₹50,000. TDS will only be deducted if the professional fees exceed this amount.