OA R.J.SONI & ASSOCIATES Chartered AccOUmt amt S sss As we step into the financial year 2025-26, a series of significant changes in Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) rules are set to take effect from April 1, 2025. These updates, announced in the Union Finance Bill 2025, aim to simplify tax compliance and offer relief to taxpayers. 1, REMOVAL OF HIGHER TDS/TCS FOR NON-FILERS (206AB & 206CCA) > Earlier, higher TDS/TCS rates were applied to taxpayers who hadn't filed returns for the previous years and had TDS/TCS exceeding ¥50,000. > From April 1, 2025, these sections are omitted - no more higher TDS/TCS for non-filers. Impact of Omission: No penal rates — Non-filers won't face excessive TDS/TCS deductions. ¥ Simpler compliance ~ Businesses no longer need to check return filing status. ¥ Less administrative burden — Banks/ companies avoid unnecessary verification. TCS requirement for sales exceeding €50,00,000 shall no longer apply from 1* April, 2025. Impact of Omission: ¥ Reduced Compliance burden - Businesses managing high-value transactions no longer required to manage TCS compliance. ¥ Improved cash flow- Vendors and suppliers to retain more funds. v smoother Business operations- Faster and smoother transactions a Tax-0-Smart Presence: MUMBAI | JAIPUR | DELHI-NCR | BIHAR | KOLKATA | BANGALORE | CHENNATOA R.J.SONI & ASSOCIATES Chartered AccOUmt amt S sss » Threshold for TCS increased from %7,00,000 to %10,00,000, reducing compliance requirements for individuals sending money abroad. > Remittances for education purposes by obtaining education loans under LRS are now exempt from TCS, offering relief to parents and guardians supporting students abroad Impact of the changes: ¥ Reduction in compliance burden- Up to %10,00,000 TCS collection not required. ¥ Significant relief for Families funding international education- Reduces financial strain on families as they no longer need to pay TCS on top of educational expenses. ~ Easier access to Education Funds without tax liability Y Simplified remittance process- Benefits financial institutions and remittance service providers resulting in fewer transactions to handle. a a Tax-0-Smart Presence: MUMBAI | JAIPUR | DELHI-NCR | BIHAR | KOLKATA | BANGALORE | CHENNATOA R.J.SONI & ASSOCIATES 4, THRESHOLD CHANGES IN TDS The Finance Bill, 2025, has introduced changes in TDS and TCS threshold limits, aiming to reduce compliance burdens and improve liquidity for taxpayers. Below is a comparison of old vs. new limits for key sections: Interest on Securities Nil/ 5,000 10,000 193, Dividend Income 5,000 70,000 194 Interest other than Interest on | Non-Senior Non-Senior 1944 | Securities payable by Banks & | Citizens - 40,000 | Citizens - 50,000 Post Office Senior Citizens - | Senior Citizens - 50,000 1,00,000 Interest other than Interest on 5,000 70,000 194A | Securities payable by Others Winnings from lotteries and 10,000 10,000 per 194B & | Horse Races Aggregate transaction 19488 Insurance Commission 15,000 20,000 194 ‘Commission on sale of Lottery 15,000 20,000 1946 | Tickets ‘Commission or Brokerage 15,000 20,000 194H ee 2,40,000 Per —_ Annum Professional/ Technical 30,000 50,000 194) | services Income from Mutual Funds 5,000 70,000 194K Compensation on Acquisition| _2,50,000 %,00,000 19414 | of immovable property Tax-O-Smart | Technology empowering your business | ai Tax-0-Smart Presence: MUMBAI | JAIPUR | DELHI-NCR | BIHAR | KOLKATA | BANGALORE | CHENNATOA R.J.SONI & ASSOCIATES Chartered AccOUmt amt S sss Impact of Key Impacts of the Threshold Changes: ¥ Lower TDS deductions ~ Small businesses, freelancers, and landlords benefit from fewer deductions on payments. ¥ Improved cash flow — Higher thresholds mean more liquidity for businesses and individuals. Y Reduced compliance —Fewer transactions will require TDS/TCS deductions, reducing administrative efforts. Y Focus on high-value transactions ~ The tax department can concentrate on significant payments for better tax compliance. The Finance Act, 2024 has introduced Section 194T, effective April 1, 2025, bringing TDS obligations on payments made by firms to their partners. > TDS @ 10%will be applicable on any sum paid by a firm to its partners if the amount exceeds %20,000 in a financial year. > This aims to ensure tax compliance and prevent revenue leakage on payments made to partners, including remuneration, interest, and profit withdrawals. > Timber or any other forest produce (not being tendu leaves) obtained under a forest lease has been reduced from 2.5% to 2%. > Timber not obtained under a forest lease has also been reduced from 2.5% to 2%. > TCS on Tendu leaves has been removed. a a Tax-0-Smart Presence: MUMBAI | JAIPUR | DELHI-NCR | BIHAR | KOLKATA | BANGALORE | CHENNATOA R.J.SONI & ASSOCIATES Chartered AccOUmt amt S sss + KEY RECOMMENDATIONS FOR BANKS: The Finance Bill, 2025, has introduced several amendments that require banks to take immediate action to ensure compliance with updated tax provisions. Below are the key recommendations for banks. 1, Update TDS Thresholds in Systems: Banks are advised to ensure that the new thresholds for TDS under Sections 193, 194, 194A, 194B, 194BB, 194D, 194G, 194H, 1941, 194), 194K, and 194LA are updated in their respective IT systems ensuring timely compliance with the new regulations. 2. Update Form 15G/15H Thresholds in Systems: For FY 2025-26, the basic exemption limit under the new tax regime u/s 115BAC has been increased to Rs 4 Lakhs & there shall not be any liability on the taxable income upto Rs 12 Lakhs after considering the rebate u/s 87A. Accordingly, considering that the new tax regime is the default tax regime, as per our view, Form 15G benefit can be provided to the customers upto RS @ Lakhs & Form 15H benefit can be provided upto Rs 12 Lakhs. 3. Monitor TDS Rates for Securitisation Trusts: ‘Starting from 1st April 2025, banks should be aware of the reduction in the TDS rate under Section 194LBC for all payees. The revised rate will be lowered to 10%, and it is crucial that banks adjust their systems to apply the new rate correctly. 4, Remove Higher TDS/TCS rates for Non-Filers: Effective from 1st April 2025, banks will no longer be required to apply higher TDS/TCS rates under Sections 206AB and 206CCA for individuals or entities that have failed to file their income tax returns. a Tax-O-Smart | Technology empowering your business | ai Tax-0-Smart Presence: MUMBAI | JAIPUR | DELHI-NCR | BIHAR | KOLKATA | BANGALORE | CHENNATOA R.J.SONI & ASSOCIATES Chartered AcCOUNtANtS qHEmnnnnnnn 5. Review TCS Provisions: - They must ensure that TCS is no longer collected under Section 206C (1H) for sale of goods exceeding € 50 lakhs from 1st April 2025 and must ensure their systems reflect this change. - Update TCS provisions for forest produce as per the clarified definition. - Update TCS provisions for LRS transactions. 6. Compliance with TCS Payment Deadlines: From 1* April 2025, interest @1% per month or part of the month shall be applicable on delay in collection of TCS & interest @1.5% per month or part of the month shall be applicable on delay in remittance of TCS. Hence, Banks must ensure that the TCS collections are made as soon as the TCS provisions are applicable. Also, the remittance should be made within the deadline to avoid higher interest rates. ** CONCLUSION: In conclusion, these changes aim to simplify tax compliance, reduce administrative burdens, and provide financial relief to businesses and individuals. By raising exemption limits, towering TCS rates, and removing higher rates for non-filers, the governmentis fostering a more streamlined tax environment. Staying updated with these amendments and seeking professional guidance can help ensure you remain compliant and manage your finances efficiently. a Tax-O-Smart | Technology empowering your business | ai Tax-0-Smart Presence: MUMBAI | JAIPUR | DELHI-NCR | BIHAR | KOLKATA | BANGALORE | CHENNATR.J.SONI & ASSOCIATES Chartered AccOUmt amt S sss TDS RATE CHART FOR THE FINANCIAL YEAR 2025-26 Higher of Income from | AsperTax | Average 192 NA 20% or | All Person | 197 Salaries Slab Rate Slab Rates ‘Accumulated 192A Rs 50,000/- 10% NA 20% — | All Person | 197/197A Provident Fund Interest on 193 Securities / | Rs 10,000/- 10% 10% 20% All Person | 197/197A Debentures 194 Dividend Rs 10,000/- 10% 10% 20% | All Person | 197/197A Interest (Other than interest Rs. ‘on securities) ae payable by for Senior Specitieg 1940 | Banking 10% 10% 20% 197/197 Citizens & Person as 60,000 for Others ‘Companies, Co-Operative Banks & Post Office Interest (Other than interest aa Specified 194A | on_ securities) | Rs 10,0007. 10% 10% 20% 197/197 Person payable by Other than a a Tax-0-Smart Tax-O-Smart | Technology empowering your business |OA R.J.SONI & ASSOCIATES Chartered AccOUmt amt S sss Banks & Post Office Rs 30,000/- single Payment to Specified 194c Payment;Rs | 1% 2% 20% 197 Contractors Person 1,00,000/- Full Year 5% Payment of 10% (Other 194D | Insurance Rs 20,0007. ‘7 (For 20% All Person | 197/197A than ‘Commission Company) Company) ‘Sum under a life insurance Life 194DA | policy, Rs 1,00,000 2% 2% 20% | Insurance | 197/197A including Company bonus, Repurchase of 194F | Units by ‘Section Omitted Mutual Fund ‘Commission or Specified 194H Rs 20,000/- 2% 2% 20% 197 Brokerage Person Rent of Land, Building or 10% 10% Rs 50,000/- Specified 1941 | Furniture 20% 197/197A ermonth Porson Rent of Plant & 2% 2% Machinery ‘Compensation on transfer of certain Rs 19418 1% 1% 20% — | AllPerson | 197 immovable | 50,00,000/- property other than Tax-O-Smart | Technology empowering your business | a Tax-0-Smart Presence: MUMBAI | JAIPUR | DELHI-NCR | BIHAR | KOLKATA | BANGALORE | CHENNATOA R.J.SONI & ASSOCIATES Chartered AccOUmt amt S sss agricultural land Payment of Rs 0,000/- rent by certain 19416 Rent per 2% 2% 20% — | All Person | 197 individuals or month HUFs Professional / Royalty » 10% 10% Specified 194) Rs 50,0007. 20% 197 Others Person Technical Fees 2% 2% ‘Any remuneration / fees ' commission to a director of a 194) | company, Specified - 10% 10% 20% 197 {ba) | other than Person those on which tax is deductible under section 192. Dividend trom 194K Rs 10,000/. 10% 10% 20% All Person | 197/197A Mutual Funds ‘Cash withdrawal from Bank Rs 194N | Account — in 2% 2% 20% — | allPerson | - 20,00,000/- excess of Rs. 20 lakh = in caso of a a Tax-O-Smart | Technology empowering your business | a 022- 48600000 (ten Ii poo sacrt NCR | BIHAR] KOLKATA | BANGALORE | CHENNAT MUMBAI | JAIPUR | DELHIOA R.J.SONI & ASSOCIATES Chartered AccOUmt amt S sss person who has not filed the retus for preceding 3. years Cash withdrawal from Bank Account in ‘excess of Rs. 100 takh ~ in| Rs 5% 5% 20% case of a | 100,00,000/- person who has not filed the returns for preceding 3 years Cash withdrawat | Co-op -Rs from Bank | 300,00,000/- Account — in 2% 2% 20% ‘excess of Rs. | Other Rs 100 takh | 100,00,000/- Others Payment to resident Rs Specified 194m | contractors 2% : 20% 197 50,00,000/- Person and professionals ‘Applicable for 1940 | e-commerce | ** 0.1% 0.1% 5% | AllPerson | - 5,00,000/- operator a Tax-O-Smart | Technology empowering your business | ai 022- 48600000 (ten Ii ieee NCR | BIHAR] KOLKATA | BANGALORE | CHENNAT MUMBAI | JAIPUR | DELHIOA R.J.SONI & ASSOCIATES Chartered AccOUmt amt S sss only for HUF & Individual Payment to Higher of, Aspertax | Average Specified 194P | Specialized NA 20% or Slab Rate Person Senior Citizen Slab Rates Purchase of | Rs Specified 194Q 0.10% | 0.10% 5% Goods 50,00,000/- Person Benefit of perquisite in Specified 194R | respect —_of | Rs 20,000/- 10% 10% 20% Person Business or profession. Payment on transfer of 1948 Rs 50,000/- 1% 1% 20% — | Allperson virtual digital asset Payments to 194T | partners of | Rs 20000/- 10% 10% 20% «=| Firms | - firms Note: Section 206AB has been omitted rom FY 2025-26 onwards. Note: The text highlighted in yellow reflects the new provisions introduced in the Finance Bill 2025. a a Tax-0-Smart ‘Tax-O-Smart | Technology empowering your busi Presence: MUMBAI | JAIPUR | DELHI-NCR | BIHAR | KOLKATA | BANGALORE | CHENNATR.J.SONI & ASSOCIATES Chartered AccOUmt amt S sss FOR NON-RESIDENTS - TDS Rate Chart for F.Y 2025-26 In case of payments made to the Non-Residents, the TDS Rate depends upon the nature of remittance, applicability of the DTAA, etc. As per Section 195 of the Income Tax Act, TDS @30% (Plus Surcharge & Cess, as applicable) is deductible on interest payable to the Non-Residents. Interest / Other Income paid to Non-Residents 195 30% except Foreign Company 195 _| Interest / other income Paid to Foreign Company 35% 195 | Dividend 20% 195 _| Fees for Technical Services 20% 195 | Royalty 20% 195 _| Short Term Capital Gains (u/s 111A) 20% 195 | Long Term Capital Gains (u/s 112A) 12.5% 196A | Dividend from Mutual Funds 20% Note: The above-mentioned rates are to be increased by the surcharge (as applicable) & cess @4%. Tax-O-Smart | Technology empowering your business | aiOA R.J.SONI & ASSOCIATES Chartered AccOUmt amt S sss TCS RATE CHART FOR FINANCIAL YEAR 2025-26: 206C B ‘Timber obtained under a forest lease - SRE | __ 6 __| barked any cer ae : 206C D Any other forest produce not being a timber/tendu leave 206C E Scrap - £ 206C e Grant of license, lease, etc. of Parking lot - 2 (206C G Grant of license, lease, etc. of Toll Plaza = 2 206C H Grant of Mining and quarrying * 2 206C 1 Tendu Leaves - 5 206C A Minerals, being coal or lignite or iron ore > 1 206C K TCS on sale of Bullion Rs 2,00,000 1 Rs 2066 M TCS on sale in cash of any goods Rs 2,00,000 7 rose | _ ToSonremitance unde 15 or purchese of : 5 Matalin eraenetatonnteaete! TCS on remittance under LRS for purchase of 206C © | overseas tour program package (Above Rs 10,0000) . 20 2066 P| taken from financial institution mentioned in section omitted 80E 206c 2 TCS on remittance under LRS- except forthe 20 purposes of education or medical treatment occ | 1 | educaton(otherthanbyabtsningeducatontoan)or| agutggg |S medical treatment 206C R TCS on sale of goods Omitted a Tax-O-Smart | Technology empowering your business | ai Tax-0-SmartOA R.J.SONI & ASSOCIATES Chartered AccOUmt amt S sss INCOME TAX SLAB RATES FOR FY 2025-26 Tax Rate Up to 60 Yrs. (Rs.) 60-80 Yrs. (Rs.) Above 80 Yrs. (Rs.) 0% Up to 250000 Up to.300000 Upto 500000 5% 250001 -500000 300001-500000 NA 20% 500001-1000000 500001-1000000 500001-1000000 30% Above 1000000 ‘Above 1000000 ‘Above 1000000 Note 1: Tax Rebate u/s 87A up to Rs 12,500 if Total Taxable Income is up to Rs 5,00,000 Note 2: Standard Deduction of Rs 50,000 u/s 16(ia) is applicable in the Old Tax Regime Note 3: Health & Education Cess @4% is payable on the Basic Tax Amount Less Rebate w/s 87A Note 4: Surcharge Applicable if Total Taxable Income Exceeds Rs 50,00,000 Income Stab (Rs) Tax Rate meee 25% ‘Above 2400000 0% Note 1: In the New Tax Regime, the same Income Slabs are applicable for all the Age Groups Note 2: Tax Rebate u/s 87A up to Rs 60/000 if Total Taxable Income is up to Rs 12,00,000 Note 3: Standard Deduction of Rs 75,000 u/s 16(ia) is applicable in the New Tax Regime Note 4; Health & Education Cess @4% is payable on the Basic Tax Amount Less Rebate u/s 87A Note 5: Surcharge Applicable if Total Taxable Income Exceeds Rs 50,00,000 Note 6: Marginal Reliof Available if Taxable Income is between Rs 12,00,000 & Rs 12,70,588 DISCLAIMER ‘The information contained inthis documeat is prepazed by RJ. Soni & Associates (hereinafter refesed to as RUSA) for information purpose only. It {does not constitute any legal advice or tax advice, In no way, this document should be treated as a marketing material oreffor's to solicit a client. While ‘we have made every atempt to ensure thatthe information contained in this document is true, RISA. its partners andlor any ofits employees make no claims / guarantee about its accuracy, completeness, or up-to-date character, or wasranty, express or implied, including the wasranty of opinions expressed fora particular purpose, or assume any liability or responsibility forthe accuracy. completeness or usefulness of any infermation available ‘rom this document ‘Tax-O-Smart | Technology empowering your business | ai Tax-0-Smart