With the start of the new fiscal year (FY 2024-25), significant changes are set to take effect, starting April 1, 2024. India’s Finance Minister, Nirmala Sitharaman, has introduced several reforms and updates to the existing tax system.

One of the major reforms is for senior citizens. From April 1, 2025, senior citizens will be exempt from TDS on interest income up to Rs 1 lakh earned from Fixed Deposits (FDs), Recurring Deposits (RDs), and similar instruments. 

For the general public, the TDS threshold on interest income has been raised from Rs 40,000 to Rs 50,000.

This means that banks will only deduct TDS if an individual’s interest income exceeds Rs 50,000 annually, providing relief for those who earn a moderate income from their deposits.

The new rules also simplify TDS for gaming winnings. TDS will now be deducted only when an individual’s winnings exceed Rs 10,000, eliminating the previous rule of aggregating winnings.

This means that even if a person wins Rs 8,000 multiple times, no TDS will be deducted unless their total winnings exceed Rs 10,000.

Additionally, commission earners will benefit from increased TDS thresholds. For insurance agents, the threshold has been raised from Rs 15,000 to Rs 20,000.

Investors in mutual funds and equities will also see a higher dividend tax exemption limit, which has increased from Rs 5,000 to Rs 10,000.