Tax deducted at source is known as TDS. According to the Income Tax Act, if a business or individual makes a payment that is covered by one of the sections below, they must dedcut TDS if the payment exceeds the specified amount. TDS must be deducted at the below rates prescribed by tax department.
The different TDS rates that apply for the Financial Year 2023-2024 (Assessment Year 2024-2025) which runs from April 1, 2023, to March 31, 2024—are presented in this article. It also describes the changes to TDS that have been proposed in Budget 2023. Let’s understand the TDS Rate Chart for FY 2023-24 with limit.
Table of Contents
What is TDS?
TDS, or Tax Deducted at Source, is a taxation method in which taxes are deducted at the source of income at the time of payment. The Indian government introduced it to curb tax evasion. The TDS deducted is subsequently reported to the government. TDS is levied on revenues such as rent, interest, salaries, and commissions.
Latest TDS Updates in Union Budget 2023-2024
The TDS Rate Chart for FY 2023–2024 (AY 2024–2025) have a number of updates and changes. Below is a summary of these changes:
Section 192A: The TDS rate on PF withdrawal has been reduced from the maximum marginal rate to 20% in case employee does not have PAN.
Section 193: Interest on listed debentures will not be exempt from TDS. Consequently, tax must be deducted from interest on these particular securities.
Section 194BA: TDS on online gaming income will be implemented on April 1st, 2024.
Section 194N: For cash withdrawals by cooperative societies, the TDS threshold has been increased. Tax will be deducted on cash withdrawals over Rs.3 crore as of April 1, 2023, as opposed to the previous limit of Rs.1 crore.
Section 196A: Starting on April 1st, 2023, non-residents who receive income from mutual funds in India may present a Tax Residency Certificate in order to receive the benefit of TDS at the rate specified in the tax treaty, rather than the flat rate of 20%.
TDS Rate Chart for FY 2023-24 with limit (AY 2024-25)
| Section | Nature of Transaction | TDS Rate (%) | Threshold Limit (INR) |
| 192 | Salary | Normal slab rates as per Old or New Tax Regime as opted by employee | Basic exemption limit |
| 192A | Premature Withdrawal of EPF | 10% if PAN is provided. 20% If withdrawal is made without PAN | 50,000 |
| 193 | Interest on securities | 10% | 2500 |
| 194 | Dividend | 10% | 5,000 |
| 194A | Interest on deposit in a bank or post office (Bank Deposit/Post Office Deposit/Banking Co-Society Deposit) | 10% for both | Senior Citizens- 50,000 Others- 40,000 |
| 194A | Interest from other sources (other than interest on securities and interest on bank deposits) | 10% | 5,000 |
| 194B | Income from lottery winnings, puzzles, crosswords, card games and other games | 30% | 10,000 |
| 194BA | Earnings from online games | 30% | No threshold limit |
| 194BB | Income earned from winning in horse race | 30% | 10,000 |
| 194C | Payment made to subcontractor or contractor | HUF/Individuals: 1% Others: 2% | Single transaction- 30,000 Aggregate transactions- 1,00,000 |
| 194D | Insurance commission to:
| 5% for Individuals 10% for companies | 15,000 |
| 194DA | Payment made for life insurance policy | 5% | 1,00,000 |
| 194E | Payment to non-resident sports sportsmen or association | 20% (additional surcharge and a 4% cess) | No threshold limit |
| 194EE | Payment made for National Savings Scheme | 10% | 2,500 |
| 194F | Payment for re-purchase of the units by Mutual Fund or UTI | 20% | No threshold limit |
| 194G | Commission on selling lottery tickets | 5% | 15,000 |
| 194H | Commission or brokerage | 5% | 15,000 |
| 194-I(a) | Rent for plant and machinery | 2% | 2,40,000 |
| 194-I(b) | Rent for land, building, furniture or fitting (immovable property) | 10% | 2,40,000 |
| 194-IA | Payment for acquisition of immovable property other than agricultural land | 1% | 50,000 per month |
| 194-IB | Rent paid by HUF/Individual (who is not required to conduct tax audit u/s 44AB) | 5% | 50,000 per month |
| 194-IC | Payment under JDA (Joint Development Agreements) | 10% | No threshold limit |
| 194J | Fees paid for professional services or technical service | 10% | 30,000 |
| 194J | Fees paid for royalty in the nature of consideration for sale, distribution or exhibition of cinematographic films | 2% | 30,000 |
| 194K | Payment of dividend by Mutual Funds | 10% | No threshold limit |
| 194LA | Payment of Compensation on acquisition of immovable property | 10% | 2,50,000 |
| 194LB | Interest paid to Non-resident on Infrastructure Debt Fund | 5% (additional surcharge and a 4% cess) | No threshold limit |
| 194LBA (1) | Payment of income received by Business trust from an SPV | 10% | No threshold limit |
| 194LBB | Payment of income received by a unit holder from an investment fund | 10% | No threshold limit |
| 194LBC | Income from investment in securitization trust:
|
| No threshold limit |
| 194M | Payment of commission, brokerage by individual/HUF (except income tax commission under Section 194C, 194H, and 194J) | 5% | 50 lakhs |
| 194N | Cash withdrawal exceeding a specific amount | 2% | 1 crore |
| 194N | Cash withdrawal from multiple bank accounts during the previous financial year | ||
| Amount exceeding 1 crore (exceeding 20 lakhs for people not filing ITR for previous 3 years) | 2% | 1 crore | |
| Aggregate cash withdrawal exceeding 20 lakhs | 2% | 20 lakhs | |
| Aggregate cash withdrawal exceeding 1 crore | 5% | 1 crore | |
| 194O | Payment to e-commerce participant by e-commerce operator | 1% 5% If PAN is not available | 5,00,000 |
| 194P | TDS for senior citizens aged over 75 years | Normal tax slab rates | Basic exemption limit |
| 194Q | Purchase of goods after 1st July 2021 | 0.1% | 50,00,000 |
| 194R | TDS on benefit or Perquisite of a business or profession | 10% | 20,000 |
| 194S | Payment on transfer of virtual digital assets | 1% | Specified Persons- 50,000 Others- 10,000 |
| 195 | Income on investments of NRI citizens | 20% | No threshold limit |
| 195 | LTCG under section 115E in the case of NRI | 10% | No threshold limit |
| 195 | LTCG u/s 112(1)(c)(iii) | 10% | No threshold limit |
| 195 | LTCG u/s112A | 10% | No threshold limit |
| 195 | STCG u/s 111A | 15% | No threshold limit |
| 195 | Other LTCG other than LTCG mentioned u/s 112A, 10(33), 10(36) | 20% | No threshold limit |
| 195 | Interest paid on borrowings from Indian company or government in Indian rupees | 20% | No threshold limit |
| 195 | Income from royalty, paid by Indian company or Indian government under section 115A | 10% | No threshold limit |
| 195 | Income from royalty by government or Indian company as per an agreement according to the industrial policy. | 10% | No threshold limit |
| 195 | Income from royalty payable from Indian companies or the government. (The Agreement should be made between 31st Mar 1961 to 1st Apr 1976) | 50% | No threshold limit |
| 195 | Income from royalty to be paid by government or Indian company in pursuance of an agreement on matters included in the industrial policy | 10% | No threshold limit |
| 195 | Income from technical fees to be paid by Indian government or company in pursuance of an agreement for industrial policy | 10% | No threshold limit |
| 195 | Income from technical fees payable by government or Indian concern in pursuance of an agreement on matters related to industrial policy (The agreement for such payment is entered in between 29th February 1964 and 1st April 1976) | 50% | No threshold limit |
| 195 | Income from technical fees to be paid by government or Indian company in accordance with an agreement on industrial policy matters. (The agreement for the payment is entered between 29th Feb 1964 and 1st Apr 1976) | 10% | No threshold limit |
| 195 | Any other income | 30% | No threshold limit |
| 195 | Any other income | 40% | No threshold limit |
| 196B | LTCG and other income from units of an offshore fund | 10% | No threshold limit |
| 196C | LTCG and other income from foreign currency bonds or Indian GDRs | 10% | No threshold limit |
| 196D | Income (except dividend and capital gain) from FIIs | 20% | No threshold limit |
| 206AB | Payment made to people not filing their ITR | -2 times the rate given in the Income Tax Act – 5%, whichever is higher | No threshold limit |
| 206AA | TDS rate if PAN not available | Rates specified or 20%, whichever is higher | No threshold limit |
Read also: TDS on Rent – Section 194I, IB, IC & 195 of Income Tax Act.
TDS Rate Chart for FY 2023-24 pdf
Discover the TDS Rate Chart for FY 2023-24 in a convenient PDF format, simplifying your tax journey. Download Latest TDS Rate Chart for FY 2023-24 (AY 2024-25) now for easy access to essential tax deduction information.
Conclusion
Understanding the TDS Rate Chart for FY 2023-24 is crucial for smooth financial transactions. Navigating through tax deductions can be complex, but with the right knowledge of the TDS rates, one can ensure compliance and avoid unnecessary hassles. Stay informed, plan wisely, and make your financial journey a smoother ride in the upcoming fiscal year.
Frequently Asked Questions (FAQ)
TDS stands for Tax Deducted at Source. Under this method, if a person (deductor) is required to pay another person (deductee), the deductor will deduct tax at the source and transmit the balance to the deductee.
Tax is one of the primary causes, among others. Employers deduct tax from your wage before depositing it in your account and submitting it to the government on behalf of the employee. The principle of subtracting taxes before making a payment is known as TDS (Tax Deduction at Source).
The TDS is calculated by dividing the employee’s projected tax burden for the fiscal year by the number of months of employment with the specific company. However, if the employee does not have a PAN, TDS will be deducted at 20% plus 4% cess.
If you are in the 5% tax rate, you can now seek a TDS refund for the additional amount deducted. Similarly, you can also claim a TDS refund of excess TDS deducted on salary due to the non-submission of 80C investment proofs or rent receipts to the employer for house rent allowance.