Budget: First, understand TDS and TCS, and then you will understand what relief is given in the budget..

Finance Minister Nirmala Sitharaman has given a big gift to the middle class people by making income up to Rs 12 lakh tax free in Budget 2025. Not only this, she has also made some announcements regarding TDS and TCS. In the budget, the limit of deduction on interest for the elderly has been doubled. It has been increased from Rs 50,000 to Rs 1,00,000. Apart from this, the annual limit for TDS on rent has been increased from Rs 2.40 lakh to Rs 6 lakh.

At the same time, Sitharaman has proposed to increase the limit of collecting 'Tax at Source' (TCS) under RBI's Liberalized Remittance Scheme (LRS). The Finance Minister has proposed to increase the limit of TCS from Rs 7 lakh to Rs 10 lakh. Let us tell you that till now 5 percent of TCS had to be paid for sending more than Rs 7 lakh for education and treatment. However, if money is sent through an education loan, then no TCS is charged. But now if you send Rs 10 lakh for the fees or other expenses of your children studying abroad, then you will not have to pay tax. The Finance Minister has also proposed to remove TCS on remittance in matters related to education.

What is LRS

When you transfer money abroad for remittance, travel and investment under LRS i.e. Liberalized Remittance Scheme, then you have to pay TCS on it. This tax is deducted by the bank or remittance service before sending money abroad.

Now understand what is TDS.

TDS means Tax Deduction at Source. If a person has any income, then tax is deducted from that income, and the remaining amount is given. This is called TDS. TDS is deducted from different types of income sources like salary, interest, or commission received on any investment, etc. The government collects tax through TDS. TDS deducted from all sources of income is deposited with the government. In return, you also get a certificate that tells how much TDS was deducted from a particular person and how much amount went to the government account.

If TDS is more than the income tax, a refund is claimed and if it is less, advance tax or self-assessment tax has to be deposited. The responsibility of depositing TDS in the government account lies with the person making the payment or the institution that is making the payment. Those who deduct TDS are called deductors. At the same time, the one who gets the payment after deducting the tax is called the deductee.

What is TCS?

TCS means Tax Collected at Source. TCS is paid by the seller, dealer, vendor, and shopkeeper. However, he collects it from the buyer or customer while selling any goods. While taking the price of the goods, the tax money is also added to it. After collecting it, it is the job of the seller or shopkeeper to deposit it. TCS is levied on specific types of goods like liquor, tendu leaves, timber, scrap, minerals, etc.