TDS Rate chart for the FY 2023-24 (AY 2024-25)

Posted 2023-04-18 10:20:41

Tax Deduction at Source (TDS) is a crucial compliance requirement for Income Tax Assessees. The Income Tax Law contains several sections that specify varying TDS rates, payment types, and threshold limits for TDS. The Budget 2023 has introduced some significant changes concerning TDS. These changes include a higher limit of 3 crore for TDS on cash withdrawal provided to co-operative societies, removing the minimum threshold of INR 10,000 for TDS related to online gaming, and reducing the TDS rate from 30% to 20% on the taxable portion of EPF withdrawal in non-PAN cases.

This article presents a tabular representation of the various TDS rates applicable for the Financial Year (FY) 2023-2024 or Assessment Year (AY) 2024-2025, which spans from 01.04.2023 to 31.03.2024. Additionally, it also explains the changes proposed in Budget 2023 with respect to TDS.

Updates concerning TDS in Union Budget 2023-24

The TDS Rate Chart for FY 2023-2024 / AY 2024-2025 includes several updates and changes. These changes are outlined below:

Section 194BA: TDS introduced on income from online gaming, applicable from 1st April, 2024.

Section 196A: Non-residents earning income from mutual funds in India can provide a Tax Residency Certificate from April 1st, 2023, to avail the benefit of TDS as per the rate given in the tax treaty, instead of the flat rate of 20%.

Section 192A: The TDS rate on PF withdrawal for employees who do not have PAN has been reduced from the maximum marginal rate to 20%.

Section 193: There will be no exemption from TDS on interest from listed debentures. Thus, tax has to be deducted on interest on such specified securities.

Section 194N: The TDS threshold on cash withdrawal by co-operative societies has been increased. Starting April 1st, 2023, tax will be deducted on cash withdrawals exceeding Rs 3 crore, instead of the previous limit of Rs 1 crore.

What is TDS (Tax Deducted at Source)?

The TDS stands for tax deducted at source. As per the Income Tax Act, any company or person making a payment is required to deduct tax at source if the payment exceeds certain threshold limits. TDS has to be deducted at the rates prescribed by the tax department.

TDS Rate Chart For Financial Year 2023-24 and Assessment Year 2024-25

Section of the Income-tax Act: 192

Nature of Payment: Salary Payment

Rate of TDS: Normal slab rates or New Tax Regime Slab Rate as opted by employee

Threshold (INR): Taxable Income that is laible to tax

Remarks: Basic exemption limit for employees

Section of the Income-tax Act: 192A

Nature of Payment: Premature Withdrawal from EPF

Rate of TDS: 10%

Threshold (INR): 50000

Remarks: The suggestion is to remove the second provision in Section 192A of the act, which would result in tax being deducted The suggestion is to remove the second provision in Section 192A of the act, which would result in tax being deducted at a rate of 20% instead of the maximum marginal rate in the event that the individual fails to provide their PAN for payment of their outstanding balance. This change would come into effect for the Assessment Year 2023-24.

Section of the Income-tax Act: 193

Nature of Payment: Interest on Securities

Rate of TDS: 10%

Threshold (INR): 2500

Remarks: The proposal suggests the removal of clause ix from the proviso to Section 193 of the Act. This would result in the exemption from TDS on payment of interest on listed debentures to a resident being eliminated, starting from 01-04-2023.

Section of the Income-tax Act: 194

Nature of Payment: Dividend

Rate of TDS: 10%

Threshold (INR): 5000

Remarks: –--

Section of the Income-tax Act: 194A

Nature of Payment: Interest other than interest on securities (Bank Deposit/Post Office Deposit/Banking Co-Society Deposit)

(a) Senior Citizens (b) Others

Rate of TDS: 10%

Threshold (INR): (a) Senior Citizens - 50000, (b) Others — 40000

Remarks: –--

Section of the Income-tax Act: 194A

Nature of Payment: Interest other than interest on securities (Other than Bank Deposit/Post Office Deposit/Banking Co-Society Deposit)

Rate of TDS: 10%

Threshold (INR): 5000

Remarks: ---

Section of the Income-tax Act: 194B

Nature of Payment: Winnings from lotteries, crossword puzzles, card games and other games

Rate of TDS: 30%

Threshold (INR): 10000

Remarks: The threshold limit of 10,000 for TDS on lottery, crossword puzzles, and other similar games shall remain in place, but it will now apply to the total winnings received throughout a financial year. Additionally, starting from 01-07-23, there is a proposal to amend Section 194B. The amendment aims to exclude online games from the scope of this section and introduce a new section 194BA

Section of the Income-tax Act: 194BA

Nature of Payment: Winning from Online Games

Rate of TDS: 30%

Threshold (INR): Nil

Remarks: As per the proposed amendment, any individual who is responsible for paying income to another individual in the form of winnings from an online game during a financial year must deduct income-tax on the net winnings present in the user account at the end of the financial year. The computation method for the same shall be prescribed. However, in cases where there is a withdrawal from the user account during the financial year, the income-tax shall be deducted at the time of withdrawal on the net winnings present in the withdrawal amount and the remaining net winnings in the user account at the end of the financial year.

Section of the Income-tax Act: 194BB

Nature of Payment: Income earned from winning in horse races

Rate of TDS: 30%

Threshold (INR): 10000

Remarks: Threshold limit 10,000 for TDS shall continue but shall apply to aggregate winnings during a financial year

Section of the Income-tax Act: 194C

Nature of Payment: Payment of Contractors and sub-contractors

Rate of TDS: 1% (individual/HUF) 2% (others)

Threshold (INR): Single Transaction: 30,000/ Aggregate of Transactions: 1,00,000

Remarks: –

Section of the Income-tax Act: 194D

Nature of Payment: Insurance Commission

Rate of TDS: 5% (Individual)

10% (Companies)

Threshold (INR): 15000

Remarks: –

Section of the Income-tax Act: 194DA

Nature of Payment: Payment in respect of life insurance policy

Rate of TDS: 5%

Threshold (INR): 100000

Remarks: –

Section of the Income-tax Act: 194E

Nature of Payment: Payment to non-resident sportsmen/sports association

Rate of TDS: 20%

Threshold (INR): –

Remarks: The rate of TDS shall be increased by applicable surcharge and Health & Education cess.

Section of the Income-tax Act: 194EE

Nature of Payment: Payments in respect of deposits under National Savings Scheme

Rate of TDS: 10%

Threshold (INR): 2500

Remarks: –

Section of the Income-tax Act: 194F

Nature of Payment: Payments on account of re-purchase of Units by Mutual Funds or UTI

Rate of TDS: 20%

Threshold (INR): ----

Remarks: –

Section of the Income-tax Act: 194G

Nature of Payment: Commission, prize etc., on sale of lottery tickets

Rate of TDS: 5%

Threshold (INR): 15000

Remarks: –

Section of the Income-tax Act: 194H

Nature of Payment: Commission or brokerage

Rate of TDS: 5%

Threshold (INR): 15000

Remarks: –

Section of the Income-tax Act: 194-I(a)

Nature of Payment: Rent for plant and machinery

Rate of TDS: 2%

Threshold (INR): 240000

Remarks: –

Section of the Income-tax Act: 194-I(b)

Nature of Payment: Rent for immovable property

Rate of TDS: 10%

Threshold (INR): 240000

Remarks: –

Section of the Income-tax Act: 194-IA

Nature of Payment: Payment for acquisition of immovable property other than agriculture land

Rate of TDS: 1%

Threshold (INR): 50 Lakhs

Remarks: TDS is to be deducted at the rate of one per cent of such sum paid or credited to the resident or the stamp duty value of such property, whichever is higher. In case the consideration paid for the transfer of immovable property and the stamp duty value of such property are both less than fifty lakh rupees, then no tax is to be deducted.

Section of the Income-tax Act: 194-IB

Nature of Payment: Payment of rent by individual or HUF

Rate of TDS: 5%

Threshold (INR): 50000 per Month

Remarks: –

Section of the Income-tax Act: 194-IC

Nature of Payment: Payment for Joint Development Agreements

Rate of TDS: 10%

Threshold (INR): ---

Remarks: –

Section of the Income-tax Act: 194J

Nature of Payment: Fee for Professional or Technical Services (FTS), Royalty, etc.

Rate of TDS: 2% (FTS, certain royalties, call centre)

10% (others)

Threshold (INR): 30000

Remarks: –

Section of the Income-tax Act: 194K

Nature of Payment: Payment of dividend by Mutual Funds

Rate of TDS: 10%

Threshold (INR): –

Remarks: –

Section of the Income-tax Act: 194LA

Nature of Payment: Payment of Compensation on acquisition of immovable property

Rate of TDS: 10%

Threshold (INR): 250000

Remarks: –

Section of the Income-tax Act: 194LBA(1)

Nature of Payment: Payment of income by Business trust

Rate of TDS: 10%

Threshold (INR): ---

Remarks: –

Section of the Income-tax Act: 194LBB(i)

Nature of Payment: Payment of income by Investment fund

Rate of TDS: 10%

Threshold (INR): ---

Remarks: –

Section of the Income-tax Act: 194LBC(1)

Nature of Payment: Income by securitization trust

Rate of TDS: 25% (Individual/HUF) 30% (Others)

Threshold (INR): ---

Remarks: –

Section of the Income-tax Act: 194M

Nature of Payment: Payment to commission, brokerage etc. by Individual and HUF

Rate of TDS: 5%

Threshold (INR): 50 Lakhs

Remarks: –

Section of the Income-tax Act: 194N

Nature of Payment: Cash withdrawal during the previous year from one or more account maintained by a person with a banking company, co-operative society engaged in business of banking or a post office

Rate of TDS: 2% / 5%

Threshold (INR): 20 Lakhs / 1 Crore

Remarks: –

Section of the Income-tax Act: 194-O

Nature of Payment: TDS on e-commerce participants

Rate of TDS: 1%

Threshold (INR): 5 Lakhs

Remarks: In case of non-availability of PAN, TDS Rate shall be 5%

Section of the Income-tax Act: 194P

Nature of Payment: TDS on Senior Citizen above 75 Years

Rate of TDS: Tax Rates in Force

Threshold (INR): Taxable Income liable to Tax

Remarks: –

Section of the Income-tax Act: 194Q

Nature of Payment: Purchase of goods (applicable w.e.f 01.07.2021)

Rate of TDS: 0.10%

Threshold (INR): 50 Lakhs

Remarks: –

Section of the Income-tax Act: 194R

Nature of Payment: TDS on benefit or perquisite of a business or profession

Rate of TDS: 10%

Threshold (INR): 20000

Remarks: –

Section of the Income-tax Act: 194S

Nature of Payment: Transfer of Virtual Digital Assets

Rate of TDS: 1%

Threshold (INR):---

Remarks: ---