Union Finance Minister Nirmala Sitharaman on Friday proposed to double the limit for tax deducted at source (TDS) on income interest, hike the threshold on rent and exempt withdrawals from National Savings Scheme (NSS) accounts from tax for senior citizens, as she announced a slew of measures for elderly people in the Union Budget 2025-26.
In her Budget speech in the Lok Sabha, Ms Sitharaman proposed to rationalise TDS by reducing the number of rates and thresholds above which TDS is deducted. Follow Union Budget 2025-26 LIVE UPDATES here
"The limit for tax deduction on interest for senior citizens is being doubled from the present Rs 50,000 to Rs 1 lakh," the minister said in the Lower House.
For others, the limit for TDS has been increased to Rs 50,000 from the current Rs 40,000.
Similarly, the minister said, the annual limit of Rs 2.40 lakh for TDS on rent is being increased to Rs 6 lakh. This will reduce the number of transactions liable to TDS, thus benefiting small taxpayers receiving small payments.
The Union Budget also proposed to exempt withdrawals from NSS accounts on or after August 2024 from tax.
"A number of senior and very senior citizens have very old National Savings Scheme accounts. As interest is no longer payable on such accounts, I propose to exempt withdrawals made from NSS by individuals on or after August 29, 2024," she said.
The government said it has increased its focus on senior citizens, besides drug rehabilitation efforts. The Atal Vayo Abhyuday Yojana (AVYAY), which provides welfare support to senior citizens, has been allocated Rs 289.69 crore.
The Budget Session of Parliament will be conducted in two phases - the first started on January 31 and will conclude on February 13, while the second phase will begin on March 10 and end on April 4.
