The Union Budget 2025 is expected to focus on simplifying the Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) regime, making it easier for individuals and businesses to comply with tax laws. This comes after the government’s recent efforts to simplify the tax system, including the introduction of a self-declaration scheme for TDS and the e-way bill system for goods.
TDS and TCS are long-term sources of goverment revenue, and any amendment to the existing system can have a significant impact on tax collections. Union Finance Minister Nirmala Sitharaman is expected to look at further simplifying the TDS-TCS regime in this year’s budget, particularly for small and medium-sized enterprises (SMEs) and individual taxpayers.
Some of the potential changes that can be expected in the TDS-TCS regime include reducing the TDS rates, increasing the TDS threshold, and introducing a simplified online filing system for TDS returns. These changes can help to promote transparency, simplify compliance, and reduce the burden on taxpayers. The budget is likely to be presented on February 1, 2025, and the government’s decision on TDS-TCS will depend on various factors, including the state of the economy, revenue collection, and the need to promote business growth and development.