Tax Deduction at Source (TDS) is one of the ways of collecting income tax from the taxpayers in India. It is deducted by the payer of income at the time of making payment to the payee. The payer has to deposit the deducted amount with the government within a specified time limit.
TDS is applicable on various types of income such as salary, interest, commission, rent, professional fees, royalty, contract payments, etc. The rates of TDS vary depending on the nature of income and the status of the payee (resident or non-resident).
The Finance Act 2023 has introduced some changes in the TDS rates and provisions for FY 2023-24 / AY 2024-25. Here are some of the key highlights:
- Section 194BA: TDS introduced on income from online gaming, applicable from 1st April, 2024. The rate of TDS is 30% on the gross amount of winnings exceeding Rs. 10,000 in a financial year.
- Section 194N: TDS on cash withdrawal from banks, co-operative banks and post offices, applicable from 1st July, 2023. The rate of TDS is 2% on cash withdrawal exceeding Rs. 20 lakh in a financial year by a non-filer of income tax return and 0.5% by a filer of income tax return.
- Section 194Q: TDS on purchase of goods, applicable from 1st July, 2023. The rate of TDS is 0.1% on purchase of goods exceeding Rs. 50 lakh in a financial year by a buyer whose turnover exceeds Rs. 10 crore in the previous financial year.
- Section 194R: TDS on dividend income distributed by mutual funds, applicable from 1st April, 2024. The rate of TDS is 10% on dividend income exceeding Rs. 5,000 in a financial year.
- Section 194S: TDS on purchase of immovable property by non-residents, applicable from 1st April, 2024. The rate of TDS is 1% on the consideration paid for purchase of immovable property by a non-resident (other than a company) or a foreign company.
The above changes are in addition to the existing TDS rates and provisions for FY 2023-24 / AY 2024-25. For a comprehensive list of all the TDS rates and sections, you can refer to the following sources:
TDS is an important aspect of tax compliance and planning for both payers and payees of income. It is advisable to keep track of your TDS deductions and deposits and verify them with your Form 26AS (annual tax statement). You can also claim credit for the TDS deducted against your tax liability while filing your income tax return.
We hope this blog article has given you an overview of the TDS rate chart for FY 2023-24 / AY 2024-25 and the changes introduced by the Finance Act 2023. If you have any queries or suggestions, please feel free to comment below or contact us.