Budget 2025: Increased Tax Deduction Limits for Senior Citizens – How to Benefit from the New TDS Limits

Big Relief for Senior Citizens in Budget 2025

The Indian government has increased the TDS exemption limit on bank interest for senior citizens in the 2025 Budget. This means that less tax will be deducted at source (TDS) on interest income, allowing more savings for retirees.

What’s New?

• The TDS exemption limit on bank interest for general taxpayers has increased from ₹40,000 to ₹50,000.
• For senior citizens, the limit has been increased from ₹50,000 to ₹75,000 under Section 194A of the Income Tax Act.
• No TDS will be deducted on interest up to ₹75,000 for senior citizens in a financial year.

Who Benefits?

• Senior citizens earning interest from bank deposits and fixed deposits.
• Retirees looking to maximize post-retirement income.
• Investors who rely on bank interest as their primary income source.

How to Claim This Benefit?

1. Update your bank details to ensure correct TDS calculation.
2. Submit Form 15H if your total income is below the taxable limit.
3. Plan investments in fixed deposits or senior citizen savings schemes (SCSS) to maximize tax-free interest.

Why This Matters

• More savings for retirees without the hassle of tax deductions.
• Encourages fixed-income investments among senior citizens.
• Reduces the burden of TDS filing and refunds.

Final Thoughts

The higher TDS exemption limit is a welcome step for senior citizens, allowing greater financial freedom and better tax planning.

For more budget updates and financial insights, stay tuned to Stox N Tax!