Tax Deduction at Source (TDS) Rate FY 2023-24 (AY 2024-25)
What does TDS (Tax Deducted at Source) stand for?
Tax deducted at source is referred to as TDS. If a payment exceeds certain thresholds, the Income Tax Act, 1961 requires that any corporation or individual making the payment deduct tax at the source. TDS must be subtracted at the rates authorized by the tax department.
TDS (Tax Deduction at Source) is a key compliance requirement for Income Tax Assessors. Several sections of the Income Tax Act specify TDS rates, payment forms, and TDS threshold limits. TDS has experienced significant changes as a result of Budget 2023.
The maximum TDS on cash withdrawals supplied to cooperative societies has been raised to 3 crores, the minimum threshold for TDS on online gaming has been eliminated, and the TDS rate on the taxable share of EPF withdrawals in non-PAN situations has been reduced from 30% to 20%.
"This blog contains a table of the different TDS rates for the financial year (FY) 2023-2024 or Assessment Year (AY) 2024-2025."
Changes to TDS in the Union Budget 2023-24:
The TDS Rate Chart has been updated for fiscal years 2023-2024/academic years 2024-2025. These changes are as follows:
- Section 194BA: TDS on gaming revenues implemented on April 1, 2024.
- Section 196A: Beginning April 1, 2023, non-residents earning income from mutual funds in India can submit a Tax Residency Certificate to get TDS at the rate indicated in the tax treaty, rather than the flat rate of 20%.
- Section 192A: The TDS rate on PF withdrawals for employees without PANs has been lowered from the maximum marginal rate to 20%.
- Section 193: Listed debentures' interest is subject to TDS. Interest earned on such specified securities must thus be taxed.
- Section 194N: A higher TDS threshold is now in place for cash withdrawals from cooperative organizations. Starting on April 1, 2023, the tax will be deducted from cash withdrawals that are more than Rs 3 crore, up from the previous limit of Rs 1 crore.
Also read; TDS and TCS Return Due Dates for The FY 2022–2023
TDS Rate Chart for the Assessment Year 2024–2025 and the Fiscal Year 2023–2024 :
| Section of the Income-tax Act | Nature of Payment | Rate of TDS | Threshold (INR) | Remarks |
| 192 | Salary Payment | Normal slab rates or New Tax Regime Slab Rates as opted by the employee | Taxable Income that is liable to tax | Basic exemption limit for employees |
| 192A | Premature withdrawal from EPF | 10% | 50,000 | The second clause in Section 192A of the Act, which would cause tax to be deducted, is proposed to be removed. The act's second clause, which would cause tax to be withheld at a rate of 20% rather than the top marginal rate if the individual failed to produce their PAN for payment of their outstanding amount, is being suggested to be removed. This modification would take effect in the Assessment Year 2023–2024. |
| 193 | Interest on Securities | 10% | 2500 | According to the proposal, the proviso to Section 193 of the Act's clause should be removed. As a result, beginning on April 1, 2023, interest payments made on listed debentures to residents will no longer be free from TDS. |
| 194 | Dividend | 10% | 5000 | - |
| 194A |
Interest other than interest on securities (Bank Deposit/Post office Deposit/Banking Co-Society Deposit) A. Senior Citizens B. Others |
10% |
50000 40000 |
- |
| 194A |
Interest other than interest on securities (other than Bank Deposit/Post Office Deposit/Banking Co-Society Deposit) |
10% | 5000 | - |
| 194B | Winnings from lotteries, crossword puzzles, card games, and other game | 30% | 10000 | The TDS threshold limit of 10,000 will continue to be in effect for games like the lottery, crosswords, and other similar ones, but it will now only apply to the total wins accrued over the course of a fiscal year. A proposal to change Section 194B will also take effect on July 23. With the revision, this clause will no longer apply to online gaming, which will be covered by a new section 194BA. |
| 194BA | Winning from Online Games | 30% | Nil | According to the proposed amendment, any person who is in charge of providing income to another person in the form of winnings from an online game throughout a fiscal year is required to deduct income tax on the net earnings that are still in the user account at the end of the fiscal year. The way the calculation is done must be specified. However, if a withdrawal is made from the user account during the fiscal year, income tax will be withheld both at the time of the withdrawal for any net winnings included in the withdrawal amount and at the end of the fiscal year for any net winnings still in the user account. |
| 194BB | Income earned from winning in horse race | 30% | 10000 | The TDS threshold limit of 10,000 will remain in effect, but it will now only apply to total wins throughout a fiscal year |
| 194C | Payment of Contractors and sub-contractors |
1% (Individual/HUF) 2% (Others) |
Single Transaction: 30,000/Aggregate of Transactions: 1,00,000 |
- |
| 194DA | Payment in respect of life insurance policy | 5% | 100000 | - |
| 194E | Payment to non-resident sportsmen/sports association | 20% | - | The rate of TDS shall be increased by applicable surcharge and health & Education cess. |
| 194EE | Payments in respect of deposits under the National Savings Scheme | 10% | 2500 | - |
| 194F | Payments on account of re-purchase of units by Mutual Funds or UTI | 20% | - | - |
| 194G | Commission, prize, etc., on sale of lottery tickets | 5% | 15000 | - |
| 194H | Commission or brokerage | 5% | 15000 | - |
| 194-I(a) | Rent for plant and machinery | 2% | 240000 | - |
| 194-I(b) | Rent for immovable property | 10% | 240000 | - |
| 194-IA | Payment for acquisition of immovable property other than agricultural land | 1% | 50 lakhs | One percent of the amount paid to or credited to the resident, or the property's stamp duty value, whichever is larger, is to be deducted as TDS. No tax is to be subtracted if the sum of the consideration paid for the transfer of real estate and the stamp duty value of such real estate is less than fifty lakh rupees. |
| 194-IB | Payment of rent by individual or HUF | 5% | 50000 per | - |
| 194-IC | Payment for Joint Development Agreements | 10% | - | - |
| 194J | Fee for professional or Technical Services (FTS), Royalty, ETC. |
2% (FTS, certain royalties, call center) 10% (others) |
30000 | - |
| 194K | Payment of dividends by Mutual Funds | 10% | - | - |
| 194LA | Payment of Compensation on acquisition of immovable property | 10% | 250000 | - |
| 194LBA (1) | Payment of income by Business trust | 10% | - | - |
| 194LBB(i) | Payment of income by Investment Fund | 10% | - | - |
| 194LBC (1) | Income by the securitization trust |
25% (Individual/HUF) 30% (others) |
- | - |
| 194M | Payment to the commission, brokerage, etc. by Individual and HUF | 5% | 50 lakhs | - |
| 194N | Cash withdrawal during the previous year from one or more accounts maintained by a person with a banking company, cooperative society engaged in the business of banking or a post office |
2% / 5% | 20 lakhs / 1 Crore | - |
| 194-O | TDS on e-commerce participants | 1% | 5 lakhs | In case of non-availability of PAN, TDS Rate shall be 5% |
| 194P | TDS on Senior Citizens above 75 Years | Tax Rates in Force | Taxable Income Liable to Tax | - |
| 194Q | Purchase of goods (applicable w.e.f 01.07.2021) | 0.10% | 50 lakhs | - |
| 194R | TDS on benefit or perquisite of a business or profession | 10% | 20000 | - |
| 194S | Transfer of Virtual Digital Assets | 1% | - | - |
| 195 | Payment of any other sum to a Non-resident | - | - | The rate of TDS shall be increased by applicable surcharge and Health & Education cess. |
| 195 | (a) Investment made by a Non-resident Indian Citizen | 20% | - | - |
| 195 | (b) Long-term capital gains referred to in Section 115E in case of a Non-resident Indian Citizen | 10% | - | - |
| 195 | (c) Long-term capital gains referred to in sub-clause (3) of clause (c) of sub-section (1) of Section 112 | 10% | - | - |
| 195 | (d) Long-term capital gains as referred to in Section 112A | 10% | - | - |
| 195 | (e) Short-term capital gains referred to in Section 111A | 15% | - | - |
| (f) Any other income by way of long- capital gains | 20% | - | - | |
| (g) Income by way of interest payable by the Government or an Indian concern on money borrowed or debt incurred by the Government or the Indian concern in foreign currency (not being income by way of interest referred to in Section 194LB or Section 194LC) | 20% | - | - | |
| (h) Any other Income | 30% | |||
| 196B | Income from units from an offshore fund | 10% | - | - |
| 196C | Income from foreign currency bonds or GDR of an Indian company | 10% | - | - |
| 196D | Income of Foreign Institutional investors from securities | 20% | - | - |
| 206AB | Payment to non-filers, i.e., those who have not filed there in the last year |
-2 times the rate given in the Income Tax Act or Finance Act or -5%, whichever is higher |
- |
Non-filers do not include: - - People who are not required to file their ITRs - NRIs who do not have a PE in India |
| 206AA |
TDS rate in case of Nonavailability of PAN |
Rates specified above or 20% whichever is higher | - | - |
Conclusion: -
TDS is required to be deducted at a rate of 2% on payments made to taxable goods and/or service providers by certain designated people under GST. The individual deducting tax must make a TDS return on form GSTR-7 within 10 days of the end of the month. This blog covers all aspects of TDS under GST, such as the TDS rate, deduction limit, application, paperwork to be filed, applicable interest and penalties, and more.
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Thank you for sharing your expertise on this topic. Your article has enlightened a new perspective for me on this concept. I look forward to reading more from you in the future!