How Budget 2024 Changes TDS Rules: What It Means for Your Salary, Property, and Rent

Union Finance Minister Nirmala Sitharaman on Tuesday (July 23) presented her seventh consecutive budget of the Modi 3.0 in Lok Sabha with several important changes to the Tax Deducted at Source (TDS) rule.

Here is the breakdown of the key changes and how it could impact you:

1. Benefits for Salaried Employees: One of the important changes to note in this is for salaried individuals. The new provision allows you to claim claim Tax Collected at Source (TCS) as a credit against your TDS.

Earlier, the TDS could only be claimed after the Income Tax Return (ITR) filing, which often cause delay in accessing these finds. But with this update, there will more immediate benefits. The changes to these will take effective from October 1, 2024, i.e is for the fiscal year 2024-2025 onwards.

2. Reduced TDS on Rent Payments: This new change will also benefit tenants to a significant amount due to the reduction in the TDS rate on rent payments.

For instance, if you are currently paying more than Rs 50,000 per month as rent, that means, a 5 per cent TDS is deducted. But, as per the new update, it proposes lowering these rates to 2 per cent, which will also add financial ease to high rent areas.

3. Guidelines on Property Sales: Now, as per the new changes, there will be a clearer guidelines on property sales. Individuals involved in the buying and selling of property, it is note the changes to Section 194-I, which will clarify the TDS process.

Prior to this new change, the sale of the immovable property exceeding Rs 50 lakh, a one per TDS was applicable.

4. Updated TDS rules for Partnership Firms: The new changes will also affect partnership firms as well starting from April 1, 2025. According to the latest updates, payments exceeding Rs 20,000 annually to partners will attract a 10 per cent TDS under section 194T.

5. Rate reduction to E-commerce operators: As the digital marketspace is surging, the new proposed changes will also affect this segment. The TDS rates for e-commerce operators will be reduced from 1 per cent to 0.1 per cent.

6. Changes in TCS Credits for Minor’s Income: Starting from January 1, 2025, the new update will also benefit families where it allows clubbing the minors income as the budget allows parents to adjust TCS credits against their tax liability.

Previously, TCS credits could only be claimed by the minor.