Under the new tax regime, the normal slab rates for individuals and HUFs for FY 2023-24 have changed. In addition to the TDS rates deducted for NRI deductees, any applicable surcharge and health and education cess will be deducted. This article summarizes the income Tax Rates, surcharge, health and education cess, special rates, and rebate/relief applicable to various categories of taxpayers for the financial year 2023-24 (assessment year 2024-25) as proposed in the Finance Bill, 2023. The budget was announced on 01.02.2023 and introduced several amendments related to tax rates/computation.
What is TDS ?
TDS, or tax deducted at source, is a tax collection mechanism used in India. Under this mechanism, the payer deducts a certain percentage of the payment made to the payee and deposits it with the government on behalf of the payee. The TDS rates are prescribed by the Income Tax Department, and they vary depending on the nature of the payment and the payee's category.
2023 Budget Updates
Section 192A - TDS rate reduced to 20% from maximum marginal rate on PF withdrawal for employees without PAN
Section 193: Interest from listed debentures is not exempt from TDS. Therefore, interest on such specified securities must be taxed
Section 194 BA - Imposition of TDS on online gaming earnings
Section 194N: The TDS threshold for cash withdrawals has been raised by cooperative societies. Beginning on April 1st, 2023, tax will be deducted on cash withdrawals by cooperative societies if the amount exceeds Rs 3 crore, as opposed to the previous limit of Rs 1 crore.
Section 196A - As of April 1, 2023, non-residents who receive income from mutual funds in India may submit a Tax Residency Certificate to receive the benefit of TDS at the rate specified in the tax treaty, as opposed to 20%.
What is the TDS rate Chart in India?
The TDS rate chart in India specifies the percentage of tax to be deducted at source by the payer. The rate varies depending on the type of payment, the payee's category, and the amount of payment. The TDS rate chart is updated every year, and it is important to refer to the latest TDS rate chart before making any payment.
TDS Rate Charts for the FY 2023-24
The tables below show the various TDS rates that apply to resident and non-resident payments, as well as TDS rates on domestic and international corporations in India.
TDS RATE CHART FY: 2023-24 (AY: 2024-25)
Section
Nature of Payment
Threshold (Rs.)
Indv / HUF TDS Rate (%)
Others TDS Rate (%)
192
Salaries
–
Avg
–
192A
Premature withdrawal from EPF
50000
10
–
193
Interest on Securities
10000
10
10
194
Dividends
5000
10
10
194A
Interest (Banks)
40000
10
10
194A
Interest (Others)
5000
10
10
194A
Senior Citizen
50000
10
–
194B
Winning from Lotteries
10000
30
30
194BA
Winnings from online games
–
30
30
194BB
Winnings from Horse Race
10000
30
30
194BP
Lotteries/crossword puzzles-made in kind/cash not suffice to meet the tax liability and paid before
10000
30
30
194C
Contractor – Single Transaction
30000
1
2
194C
Contractor – During the F.Y.
1 Lakh
1
2
194C
Transporter (44AE) declaration with PAN
–
–
–
194D
Insurance Commission (15G-15H allowed)
15000
5
10
194DA
Life insurance Policy
1 Lakh
1
1
194EE
NSS
2500
10
10
194F
Repurchase Units by MFs
–
20
20
194G
Commission – Lottery
15000
5
5
194H
Commission / Brokerage
15000
5
5
194I(a)
Rent of Plant / Machinery / Equipment
2.40 Lakh
2
2
194I(b)
Rent of Land Building & Furniture
2.40 Lakh
10
10
194IA
Transfer of certain immovable property other than agriculture land
50 Lakh
1
1
194IC
Payment under Specified agreement applicable for F.Y: 2017-18 onwards
–
10
10
194J (a)
Fees-tech srvcs, call centre, royalty for sale etc.
30000
2
2
194J (b)
Fee for professional service or royalty etc.
30000
10
10
194K
Payment of dividend by mutual Funds
5000
10
10
194LA
Compensation on transfer of certain immovable property other than agriculture land
2.50Lakh
10
10
194LA
Immovable Property (TDS exempted under RFCTLARR Act (wef 01.04.2017)
–
–
–
194LA
Immovable Property
2.50Lakh
10
10
194LB
Income by way of interest from infrastructure debt fund(non-resident)
–
5
5
194LBA
Certain income from units of a business trust (applicable from 01.10.2014)
–
10
10
194LBA
Certain income from units of a business trust to non-resident (applicable from 01.10.2014)
–
5
5
194LBB
Income in respect of investment of investment fund
–
10% for residents, 30% for non-residents
10% for residents, 40% for non-residents
194LBC
Income in respect of investment in securitization trust
–
30% for residents, 40% for non-residents, 25% for individual & HUF
30% for residents, 40% for non-residents, 25% for individual & HUF
194LC
Income by way of interest by an Indian specified company to a non-resident/foreign company on foreign currency approved loan/long term infrastructure bond ‘from outside India (applicable from July 1, 2012)
–
5
5
194LD
Interest on certain bonds and Govt. Securities (from 01.06.2013)
5
5
194M
Payment to commission, brokerage etc. by individual & HUF
50 Lakh
5
5
194N
Cash withdrawal in excess of 1 crore during the previous year from 1 or more account with a bank or co-operative society (wef 01.09.2019)
1 Cr
2
2
194NF
Payment of certain amounts in cash to non-filers
2000000
2
2
194NF
Payment of certain amounts in cash to non-filers
10000000
5
5
194O
TDS on e-commerce participants
5 Lakh
1%(01.10.2020)
1% (01.10.2020)
194P
TDS in case of Specified Senior Citizen
Not Applicable
Rates in Force
194Q
TDS on Purchase of Goods exceeding Rs. 50 Lakhs (Applicable From 01-July-2021)
In Excess of Rs. 50 Lakhs
0.1
0.1
194R
Benefits or perquisites of business or profession
20000
10
10
194RP
Benefits or perquisites of business or profession where such benefit is provided in kind or where part in cash is not sufficient to meet tax liability and tax required to be deducted is paid before such benefit is released
20000
10
10
194S
Payment of consideration for transfer of virtual digital asset by persons other than specified persons
10000
1
1
194SP
Payment for transfer of virtual digital asset where payment is in kind or in exchange of another virtual digital asset and tax required to be deducted is paid before such payment is released
Timber obtained under any other mode other than forest lease
2.5
206CP
LRS – Educational Loan – Financial Institution
0.5
The TDS charts above include all TDS amendments implemented in Budget 2023.
Conclusion:
The TDS rate chart in India is an important tool for both the payer and the payee. It ensures that the tax liability is distributed between the payer and the payee in a fair and transparent manner. The TDS rate chart is updated every year, and it is important to refer to the latest TDS rate chart before making any payment. Failure to deduct TDS or depositing it with the government can result in penalties and legal consequences. Therefore, it is important to comply with the TDS provisions and file the necessary returns on time.
In conclusion, the TDS rate chart plays a vital role in the tax system in India. It helps to ensure that the government receives its due tax revenue, and it also ensures that taxpayers do not face any undue burden. As a taxpayer, it is important to stay informed about the latest TDS rates and comply with the TDS provisions to avoid any legal consequences.