What Should Taxpayers Know about the Upcoming TDS Rule Changes in April 2025?

The new financial year, which kicked in from April 2025, has created a lot of news and buzz amongst the taxpaying population in India. The updates and changes in the new TDS rules are bound to affect everyone and directly impact how much tax you pay while managing your income — whether you’re a salaried employee, an entrepreneur, or someone earning rent.

The concept of TDS (Tax Deducted at Source) is not new. However, of late, the government has tightened the rules around it. This has been done to ensure better compliance and transparency. These tax deduction changes will affect income from various sources — and that’s why it’s important to stay informed and plan ahead.

Let’s break it all down in the simplest way possible so you can keep more of your hard-earned money and stay on the right side of the law.

Also Read: Home Loan: All You Need to Know – Godrej Capital

What is TDS and why it Matters

TDS is the amount deducted from your income before it even reaches you. It could be deducted by a company paying you a salary, a tenant paying rent, or a lender paying interest.

Why it’s important:

• TDS helps the government collect tax steadily throughout the year.
• It reduces the burden of paying large sums at the end of the year.
• It keeps your tax file up to date with the Income Tax Department.

If you earn income from different sources, understanding how much tax is deducted — and why — can help you manage your cash flow better.

What are the Upcoming Changes in April 2025?

From April 1, 2025, several new provisions will be added under the new TDS rules 2025. These are not just minor updates — they are meant to bring many income sources under stricter tax scrutiny.

These income tax deduction policies are designed to widen the tax base and capture previously under-reported sources.

How will these New TDS Rules Affect you?

The new TDS rules 2025 are not just targeted at businesses or high earners. Even regular people who earn from multiple sources will see changes.

Here’s how it might affect you:

• If you rent out your property for more than INR 50,000/month, your tenant must deduct tax.
• If you’re a freelancer or consultant earning from multiple clients, expect TDS deductions from each.
• Crypto traders may face lower profits due to higher upfront TDS.
• Game winnings, even if small, will be taxed before you receive them.
• Income from corporate bonds will now attract TDS, even if you’re not running a business.

So, it’s not just about understanding tax deduction changes. It’s also about being ready to adapt to how your income gets taxed. With income sources growing fast, the government wants more transparency in income tax deductions from all channels.

What do the New TDS Rules Mean for Home Loan Borrowers?

With the updated TDS rules effective from April 2025, home loan borrowers must pay closer attention to compliance with them when they step out to purchase property. Under Section 194-IA of the Income Tax Act of India, 1961, buyers are required to deduct 1% TDS on property transactions exceeding INR 50 lakh, regardless of whether part of the payment is financed through a home loan.

Since the lender pays the seller directly, the buyer must ensure TDS is still deducted and deposited with the government. While some lenders may assist with this process, the legal responsibility of deducting and depositing the TDS remains with the buyer. Doing this is essential to avoid penalties and ensure the smooth processing of property deals.

What Should You Do to Stay Compliant?

Don’t wait until the last moment. A few small steps today can save you big trouble later.

Here's what you can do:

• Check your PAN-Aadhaar link: This avoids higher TDS (20%) in case of non-linking.
• File ITR on time: Always. Penalties are steep and increase yearly.
• Track multiple incomes: Especially if you’re freelancing, investing, or earning from rent.
• Consult a professional: Get advice if you're unsure about deductions or categories.

Keep these things in mind. After all, being aware of the new TDS rules can help you save money and stay stress-free.

Also Read: Income Tax Return - New Tax Regime vs. Old Tax Regime

The Bottom Line

The new TDS rules 2025 are not just small updates. They’re part of a wider effort by the government to ensure that tax is collected at every possible point of income. If you're earning from crypto, rent, freelancing, or even online games — you need to know how these tax deduction changes affect you.

Being prepared is key. Review your income sources, check your tax forms, and get professional help if needed. Compliance is now easier than ever — if you stay updated.

Apply for a home loan now to get expert financial support and simplify your tax journey.

Moreover, to accurately calculate your EMIs using an EMI calculator. This way, you save time and effort on calculations while also being able to plan your finances well!

FAQs

Q.1. What are the new TDS rules for 2025?

A. Under the new rules, effective from April 1, 2025, TDS will only be applicable on individual winnings exceeding INR 10,000. For example, if a person wins INR 8,000 three times, totalling INR 24,000, no TDS will be deducted as each win is below the INR 10,000 threshold.

Q.2. Is TDS mandatory for salary?

A. Yes, the deduction of TDS on an individual’s salary is mandatory under Section 192 of the Income Tax Act of India, 1961. Every employer needs to deduct TDS on their employee’s salary if the income amount is over the basic exemption limit.

Q.3. Who are exempted from TDS in India?

A. Some people are exempted from TDS. These exemptions apply to government bodies, senior citizens, low-income individuals, notified institutions, and payments below the prescribed TDS threshold limits.

Q.4. What if TDS is not deducted?

A. If TDS is required but not deducted for domestic payments, 30% of the expense amount will be disallowed when computing the taxable income.

Q.5. Is TDS refundable?

A. Basically, Tax Deducted at Source (TDS) is the sum that is deducted from a taxpayer's income, like salary, interest from bank accounts, rent, etc. TDS can be refunded if the TDS collected is more than what you owe to the government.

Disclaimer:

The contents of this article are for information purposes only and are not a financial advisory. The information is subject to update, revision, and amendment and may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Godrej Capital or its Affiliates to any requirements. Godrej Capital or its Affiliates shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any decisions, financial or otherwise, based on the contents and information mentioned. For more information , please visit www.godrejcapital.com