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Updated March 31st 2025, 12:39 IST
Will My Tax Be Deducted From April? TDS Under New Tax Regime Explained
Additionally, the new income tax regime will be the default option starting from April 1, 2025 for taxpayers.
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Income tax rules have changed and they will take effect starting April 1, 2025, impacting salaried individuals, senior citizens, professionals, freelancers, investors, as well as commission earners.
These amendments were introduced in the Union Budget 2025 and aim to rationalize the tax structure, simplify compliance and reduce the burden on small taxpayers.
Additionally, the new income tax regime will be the default option starting from April 1, 2025 for taxpayers. Those who wish to continue using the old regime (allowing deductions) need to opt in explicitly every financial year. Therefore, tax under the new tax regime will be deducted from April 1.
Revised Tax Slab Rates Under The New Regime
| Annual Income Range | Tax Rate (%) |
| Up to Rs 3,00,000 | 0% |
| Rs 3,00,001 - Rs 6,00,000 | 5% |
| Rs 6,00,001 - Rs 9,00,000 | 10% |
| Rs 9,00,001 - Rs 12,00,000 | 15% |
| Rs 12,00,001 - Rs 15,00,000 | 20% |
| Above Rs 15,00,000 | 30% |
Key Changes
Among certain key changes, the basic exemption limit has increased from Rs 2.5 lakh to Rs 3 lakh. This slab structure is applicable only under the new regime. There is a standard deduction of Rs 50,000 for salaried employees and pensioners under the new regime.
TDS (Tax Deducted At Source) Changes From April 1, 2025
The threshold limits for TDS have been revised to reduce the burden on small taxpayers and improve liquidity.
| Income Type | Existing Threshold | New Threshold (from April 1,2025) |
| Interest (senior citizens) | Rs 50,000 | Rs 1,00,000 |
| Interest (others) | Rs 40,000 | Rs 50,000 |
| Dividend (Mutual Funds & Stocks) | Rs 5,000 | Rs 10,000 |
| Commission (Insurance/Brokers) | Rs 15,000 | Rs 20,000 |
| Gaming Winnings | Aggregated winnings | Only if annual winnings are > Rs 10,000 |
| Property Sale (TDS u/s 194-IA) | Rs 50,00,000 | Rs 75,00,000 |
However, under Section 194A of the new income tax bill, senior citizens will not face TDS unless annual interest income exceeds Rs 1 lakh. For everyone else, the TDS threshold is raised from Rs 40,000 to Rs 50,000.
In case of TDS applied on dividend income, TDS will only be applicable if total dividend income exceeds Rs 10,000 in a financial year. This is applicable on both equity and mutual fund dividends.
On commissioned income TDS will be deducted only if the total commission or brokerage income exceeds Rs 20,000 in a year.
Online gaming winnings shall be subject to TDS deduction only if it exceeds Rs 10,000 per financial year. Previously, TDS was applied on aggregated transactions across the year.
On property transactions TDS at 1% under Section 194-IA will now apply only for transactions that exceed Rs 75 lakh, which was RS 50 lakh earlier.
Published March 31st 2025, 12:39 IST