Understanding the Latest TDS Rate Chart for FY 2023-24 (AY 2024-25)
This blog provides an in-depth guide on the Tax Deducted at Source (TDS) rates for the financial year 2023-24 (assessment year 2024-25). It covers the applicable TDS rates for various transactions, threshold limits, and significant updates from the latest budget. The blog also explains the responsibilities of deductors, the importance of TDS certificates, and compliance requirements to help taxpayers, employers, and financial professionals stay informed and compliant.
TDS Rate Chart for FY 2023-24 (AY 2024-25)
The Tax Deducted at Source (TDS) rate chart for the financial year 2023-24 (assessment year 2024-25) provides a detailed overview of the applicable TDS rates for various types of transactions. This guide is essential for taxpayers, employers, and deductors to ensure compliance with the TDS provisions of the Income Tax Act.
What is TDS?
Tax Deducted at Source (TDS) is a method of tax collection by the Government of India under the Income Tax Act, 1961. It is a system where the payer deducts a certain percentage of tax while making specific payments like salary, commission, rent, interest, professional fees, etc. This deducted amount is then remitted to the government, ensuring a steady inflow of revenue throughout the year.
Important Points for TDS Deduction
- Deductor Responsibility: The deductor (payer) is responsible for deducting the applicable TDS amount from the payment and remitting it to the government.
- Applicable Payments: TDS is deducted from various types of payments such as salaries, interest, dividends, rent, professional fees, commission, contractual payments, lottery winnings, and more.
- TDS Rates: TDS rates are specified by the government and vary depending on the nature of the payment and the status of the deductee.
- Higher TDS Rates: Higher TDS rates apply for companies compared to individuals, and for foreign companies compared to domestic companies. TDS is charged at a higher rate when the PAN (Permanent Account Number) is not submitted.
- Threshold Limits: TDS is applicable when the payment exceeds a specified threshold limit. The threshold is based on the aggregate of yearly payments.
- TDS Certificate: After deducting TDS, the deductor needs to issue a TDS certificate to the deductee as proof of tax deduction.
- TDS Deposit: The deductor is required to deposit the TDS amount with the government before the 7th of the subsequent month.
- TDS Return: The deductor is also obligated to furnish periodic TDS returns with the tax authorities.
Detailed TDS Rate Chart for FY 2023-24 (AY 2024-25)
| TDS Section | Nature of Payment | Threshold (₹) | For Individual / HUF | For Others |
|---|---|---|---|---|
| 192 | Payment made as salaries | ₹ 2,50,000 | Slab Rates | Slab Rates |
| 192A | Early withdrawal of EPF (Employee Provident Fund) | ₹ 50,000 | 10% | 10% |
| 193 | Interest earned on securities | ₹ 10,000 | 10% | 10% |
| 194 | Distribution of dividends | ₹ 5,000 | 10% | 10% |
| 194A | Interest from banks or post offices on deposits | ₹ 40,000 (₹ 50,000 for senior citizens) | 10% | 10% |
| 194A | Interest from sources other than securities | ₹ 5,000 | 10% | 10% |
| 194B | Winnings | |||
| 194B | Winnings from lotteries, puzzles, or games | Aggregate of ₹ 10,000 | 30% | 30% |
| 194BA | Winnings from online Games | - | 30% | 30% |
| 194BB | Winnings from horse races | ₹ 10,000 | 30% | 30% |
| 194C | Payments to contractors or sub-contractors (one-time) | ₹ 30,000 | 1% | 2% |
| 194C | Payments to contractors or sub-contractors (aggregate) | ₹ 1,00,000 | 1% | 2% |
| 194D | Commission on insurance sales to domestic companies | ₹ 15,000 | Not Applicable | 10% |
| 194D | Commission on insurance sales to non-domestic companies | ₹ 15,000 | 5% | Not Applicable |
| 194DA | Maturity of life insurance policy | ₹ 1,00,000 | 5% | 5% |
| 194EE | Payment from National Savings Scheme (NSS) | ₹ 2500 | 10% | 10% |
| 194F | Repurchase of units by UTI or any mutual fund | No Limit | 20% | 20% |
| 194G | Payments or commission on the sale of lottery tickets | ₹ 15,000 | 5% | 5% |
| 194H | Commission or brokerage fees | ₹ 15,000 | 5% | 5% |
| 194I | Rent for land, building, or furniture | ₹ 2,40,000 | 10% | 10% |
| 194I | Rent for plant and machinery | ₹ 2,40,000 | 2% | 2% |
| 194IA | Payment for transfer of immovable property (excluding agricultural land) | ₹ 50,00,000 | 1% | 1% |
| 194IB | Rent payment by individual or HUF not covered under section 194I | ₹ 50,000 (per month) | 5% | Not Applicable |
| 194IC | Payments under a Joint Development | |||
| 194IC | Payments under a Joint Development Agreement (JDA) | No Limit | 10% | 10% |
| 194J | Fees for professional and technical services | ₹ 30,000 | 10% | 10% |
| 194J | Royalty for sale, distribution, or exhibition of cinematographic films | ₹ 30,000 | 2% | 2% |
| 194K | Income from units of a mutual fund (dividends) | ₹ 5,000 | 10% | 10% |
| 194LA | Compensation for acquiring certain immovable property | ₹ 2,50,000 | 10% | 10% |
| 194LB | Interest on infrastructure bonds to Non-Resident Indians | Not Applicable | 5% | 5% |
| 194LBA(1) | Distribution of income by a business trust to its unit holders | Not Applicable | 10% | 10% |
| 194LD | Interest on rupee-denominated bonds, municipal debt security, and government securities | Not Applicable | 5% | 5% |
| 194M | Payments for contracts, brokerage, commission, or professional fees (excluding sections 194C, 194H, 194J) | ₹ 50,00,000 | 5% | 5% |
| 194N | Cash withdrawal exceeding a specified amount from the bank (with filed ITR) | ₹ 1,00,00,000 | 2% | 2% |
| 194N | Cash withdrawal from a bank (without filing ITR) | ₹ 20,00,000 | 2% | 2% |
| 194O | Amount received for sale of products/services by e-commerce service providers through digital platforms | ₹ 5,00,000 | 1% | 1% |
| 194Q | Payments for purchase of goods | ₹ 50,00,000 | 0.10% | 0.10% |
| 194S | TDS on payment of cryptocurrencies or other virtual assets | Not Applicable | 1% | 1% |
| 206AA | TDS applicable in case of non-availability of PAN | Not Applicable | Higher of the rate specified by the act, 20%, or currently applicable rate | Higher of the rate specified by the act, 20%, or currently applicable rate |
| 206AB | ||||
| 206AB | TDS on non-filers of Income Tax Return | Not Applicable | Higher of: 5%, twice the rate mentioned in the provision, or the currently applicable rate | Higher of: 5%, twice the rate mentioned in the provision, or the currently applicable rate |
Important TDS Updates in Budget 2023
- Section 194BA: Introduction of TDS on income from online gaming.
- Section 196A: Non-residents earning income from mutual funds in India can provide a Tax Residency Certificate starting April 1st, 2023, to avail the TDS benefit as per the rate specified in the tax treaty, instead of the standard 20% rate.
- Section 192A: TDS rate on PF withdrawal for employees without PAN reduced to 20% from the maximum marginal rate.
- Section 193: No exemption from TDS on interest from listed debentures. TDS must be deducted on interest earned from such specified securities.
- Section 194N: Increased TDS threshold for cash withdrawal by co-operative societies. From April 1st, 2023, TDS will be deducted on cash withdrawals exceeding ₹3 crore, up from the previous limit of ₹1 crore.
Compliance Requirements
Issuance of TDS Certificates
- Form 16: For salaried employees, issued annually.
- Form 16A: For non-salary payments, issued quarterly.
- Form 16B: For TDS on property transactions.
- Form 16C: For TDS on rent.
Timely Deposit and Return Filing of TDS
- Deposit of TDS: Typically, TDS deducted in a month must be deposited by the 7th of the following month.
- Filing of Returns: Quarterly TDS returns must be filed using forms 24Q, 26Q, 27Q, and 27EQ.
Consequences of Non-Compliance
- Interest and Penalties: Interest on late payment of TDS, penalties for failure to deduct/deposit TDS, and fees for late filing of returns.
- Disallowance of Expenses: Under Section 40(a)(ia), certain expenses can be disallowed if TDS is not deducted/deposited appropriately.
Conclusion
Understanding the TDS rates and compliance requirements is crucial for smooth financial operations and avoiding penalties. This detailed guide on the latest TDS rates for FY 2023-24 (AY 2024-25) helps taxpayers, employers, and deductors to adhere to the regulations and ensure proper tax deduction.
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Krishna Gopal Varshney
An editor at apnokacaKrishna Gopal Varshney, Founder & CEO of Myitronline Global Services Private Limited at Delhi. A dedicated and tireless Expert Service Provider for the clients seeking tax filing assistance and all other essential requirements associated with Business/Professional establishment. Connect to us and let us give the Best Support to make you a Success. Visit our website for latest Business News and IT Updates.
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Krishna Gopal Varshney
An editor at Myitronline
Krishna Gopal Varshney, Founder & CEO of Myitronline Global Services Private Limited at Delhi. A dedicated and tireless Expert Service Provider for the clients seeking tax filing assistance and all other essential requirements associated with Business/Professional establishment. Connect to us and let us give the Best Support to make you a Success. Visit our website for latest Business News and IT Updates.
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