TDS threshold for interest, rent hiked1 min read . Updated: 01 Feb 2019, 02:19 PM IST
- There will be no tax deducted at source (TDS) for interest income of up to ₹40,000
- TDS threshold for deduction of tax on rent raised from ₹1.8 lakh to ₹2.4 lakh
New Delhi: The interim budget has announced measures to reduce the compliance burden on taxpayers, particularly on tax deduction for rent paid. To be sure, these measures will not lead to additional savings for taxpayers.
The budget has announced that there will be no tax deducted at source (TDS) for interest income of up to ₹40,000. This is applicable for interest earned from banks as well as from post office deposits. This limit has been increased from the current ₹10,000.
This will mean that the bank or the post office will not deduct tax on interest income of up to ₹40,000 in an account. Accordingly, the applicable income tax will have to be paid by the account holder at the time of filing returns. This will be done by amending Section 194A of the Income Tax Act.
Similarly, the TDS threshold for deduction of tax on rent has been raised from ₹1.8 lakh to ₹2.4 lakh. This is the tax to be deducted by the person paying the rent. Accordingly, a person paying a rent of up to ₹2.4 lakh will not be required to deduct and pay tax on the rent amount. This will be done by amending Section 194I of the Income Tax Act.