TDS from April 1: It usually happens that people invest in FDs for their safe future. If you invest your money in FDs, this piece of news is very important for you. There is great news that TDS on interest on fixed deposits has seen a major rule change, effective 1 April 2023.
New TDS Limit Made For Senior Citizens
To give relief to senior citizens, the government has doubled the threshold for TDS on interest income. As of April 1, banks will deduct TDS only if the interest income exceeds Rs one lakh in a financial year. This means no TDS will be deducted if a senior citizen’s total interest income remains under this limit. This will apply to the interest earned on fixed deposits (FD), recurring deposits (RD), and all other savings instruments.
New TDS Limit For Normal People
The limit for deduction of TDS on interest income has now been raised for the common citizen from Rs 40,000 to Rs 50,000. If the total interest income remains within Rs 50,000, TDS will not be deducted. This amendment has been introduced to reduce the tax burden on the section who entirely depends on interest from FD.
Lottery TDS
TDS rules concerning lotteries have been simplified. Previously, TDS was deducted if a person was winning over Rs 10,000 a year; now TDS is deducted if a transaction is more than Rs 10,000.
Insurance Commission
Now higher TDS thresholds will apply to insurers and agents and brokers. The TDS ceiling on insurance commission has been lifted from Rs 15,000 to Rs 20,000.
Mutual Funds And Shares
Investors trading in mutual funds and shares will also now get the benefit of an increased exemption limit. The threshold of TDS on dividend income has been increased from Rs 5,000 to Rs 10,000.
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