Budget 2025 proposes Higher TDS Threshold for Bank FD Interest

The Union Budget 2025 proposed an increase in the threshold for Tax Deducted at Source (TDS) on bank fixed deposits (FDs). Under the proposal, TDS on interest earned from FDs will only apply if the total interest income exceeds Rs. 40,000 (Rs. 50,000 for senior citizens). This move aims to reduce the compliance burden on taxpayers with lower FD interest earnings, ensuring that individuals who earn less do not have to file tax returns solely for TDS purposes. It will also simplify the tax filing process for small investors. The new limit is expected to benefit many taxpayers, particularly senior citizens, by providing them with more disposable income without the added concern of TDS deductions on their FD interest income.