Union Budget 2025: How compliance burden of senior citizens has been eased and how it works | Mint

In addition to lowering income tax payable by individuals, Budget 2025 gave citizens relief by raising the threshold for tax deducted at source (TDS) and removing conditions on declaring a second house as self-occupied for tax purposes. The changes on TDS will benefit senior citizens as the paperwork they need to complete to avoid a deduction will be reduced.

Also Read: Your Budget 2025 Guide: Income tax slabs, rates, and key benefits. All your queries answered

Like the lowering of taxes on personal income tax, the raising of the threshold for TDS will put more money in the hands of people and ease their tax compliance burden. Among those who will benefit from this move are people who hold a significant amount of money as fixed deposits with banks, cooperative societies and the post office. The budget has doubled the threshold for subjecting interest to TDS for senior citizens from ₹50,000 to ₹1 lakh.

This will mean that such deposit holders may not need to file self-declaration forms (Form 15(H)) annually with the bank, society or post office requesting them not to deduct tax on interest if the amount is below that threshold. These financial entities usually deduct tax if the self-declaration is not filed and the deposit holder is then required to claim a refund when the total income is below the taxable limit. For other deposit holders, the threshold has been raised from ₹40,000 to ₹50,000.

Paperwork reduced 

Similarly, doubling the threshold for dividends paid by companies on equities and mutual funds on units from ₹5,000 to ₹10,000 will again obviate the need for paperwork (filing of Form 15 G/H) by individual shareholders/unit holders. Currently, shareholders/unitholders are required to submit Form 15 G/H separately for each company where she is a shareholder if her dividend income for that year from that company exceeds ₹5,000. This move will provide relief to small shareholders.

Raising the threshold for TDS on rent from ₹2.4 lakh to ₹6 lakh will also ease the compliance burden for individuals and small taxpayers, especially in non-metro cities. It will also ensure landlords receive more money in their hands.

Staying with house property, the budget announcement to allow taxpayers with a second home which is not rented out but kept empty for personal use intermittently to be declared as self-occupied without any conditions will provide some relief. It will reduce conflicts between taxpayers and the tax department. Currently, a second home can be shown as self-occupied subject to certain conditions such as a change in place of work to another city.