🏛️ Finance Ministry Increases Turnover Threshold for TDS
In a move to simplify tax compliance and boost ease of doing business, the Finance Ministry has increased the turnover threshold for applicability of Tax Deducted at Source (TDS) under the Income Tax Act.
This revision is aimed at relieving the compliance burden for small businesses and professionals who fall under the non-audit category.
🔄 What’s Changed?
The new turnover limits are as follows:
|
Category |
Old Limit |
New Limit |
|
Business |
₹1 crore |
₹3 crore |
|
Profession |
₹50 lakh |
₹75 lakh |
These limits apply to individuals and Hindu Undivided Families (HUFs) who are not required to get their accounts audited under Section 44AB of the Income Tax Act.
🎯 Objective
-
📉 Reduce compliance for small taxpayers
🧾 Applicability
This threshold enhancement is effective from FY 2024–25. Taxpayers below the new turnover limit will not be required to deduct TDS on payments under most sections like 194C (contracts), 194J (professional services), etc.
However, certain TDS provisions like 194IA, 194IB, 194M, and 194N will still apply irrespective of turnover.
📌 Impact
✅ Small Businesses & Freelancers: Lesser compliance burden
✅ Tax Professionals: Simplified filings for clients
✅ Government: Promotes ease of doing business
✅ Startups: Better operational efficiency
🗣️ Expert View
"This move will encourage more businesses to formalize without the fear of complex TDS procedures. It's a progressive step for MSMEs."
— CA Abhilesh Jha, Tax Consultant
⚠️ Advisory
Taxpayers must still verify if any other TDS provisions are applicable. This increase in threshold doesn't exempt them from filing TDS returns if TDS is deducted under other applicable sections.
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