Summary: Starting April 1, 2025, several key changes in TDS provisions will affect taxpayers. Penalties for late filing of TDS returns include a ₹200 daily fee until the fee equals the TDS amount. Non-filing or incorrect filing may result in fines ranging from ₹10,000 to ₹1,00,000. Key updates include changes in limits for TDS deductions in various sections. For example, Section 193 now applies TDS at 10% for amounts exceeding ₹10,000. In Section 194A, the exemption limit for senior citizens increases to ₹1,00,000, and ₹50,000 for others. Section 194 sees the limit for dividend income raised from ₹5,000 to ₹10,000. Other sections, like 194K, 194B, and 194D, also see raised exemption thresholds. Section 194-I, related to rent on plant and machinery, adjusts the limit from ₹2,40,000 to ₹6,00,000, and similar updates are made across various sections, like 194J, 194LA, and 206C(1G). These changes reflect a broader effort to refine the tax system and simplify TDS processes.
“Are you Ready for the key TDS changes applicable from April 1 , 2025?”
if not, get ready because here are the penalties;
1. Late fee at ₹200 per day for late filing of TDS Return until the late fee equals to the TDS amount .
2. A penalty ranging from ₹10,000 to ₹1,00,000 may be imposed for the non- filling or incorrect filing of TDS Returns.
Hear expert gudiance from NKRS & Co.
1 Section 193 – Ineterst on securities
Earlier the tds was deducted on any amount when credited at rate of 10% now increased to amount exceeding ₹10,000 at the same rate of 10%.
2. Section 194A – Interest other than Interest on securities
Earlier the tds was on amount exceeding ₹50,000 in case of senior citizens and ₹40,000 in case of others when payer is bank co-operative society or post office . while ₹5,000 in any other cases at rate of 10%.
Now it is at ₹1,00,000 for senior citizens and ₹50,000 in case of others when payer is bank co-operative society or post office . while ₹10,000 in any other cases at rate of 10%.
3. Section 194 – Dividend, for an individual shareholder
Earlier the tds was on amount exceeding ₹5,000 at rate of 10% now the same rate is applicable but amount has been extended to ₹10,000.
4. Section 194K – Income in respect of units of a mutual fund
Earlier the tds was on amount exceeding ₹5,000 at rate of 10% now the same rate is applicable but amount has been extended to ₹10,000.
5. Section 194B – Winnings from lottery, crossword puzzle Etc. & 194BB – Winnings from horse race
Earlier the tds was on amount exceeding ₹10,000 during the financial year at rate of 30% now the same has been changed to single transaction during the year.
6. Section 194D – Insurance commission
Earlier this was on amount exceeding ₹15,000 at rate of 5% for individual and 10% for companies now the amount limit has been extended to ₹20,000 keeping the rates constant.
7. Section 194G – Income by way of commission, prize etc. in case of Lottery
Earlier there was tds at rate of 5% from the period april 1, 2024 to september 30, 2024 on amount exceeding ₹15,000 and the same was changed to rate of 2% from period beginning October 1 2024 to March 31, 2025.
Now from april 1, 2025 the amount limit has been also extended to ₹20,000 keeping the rate of 2% constant.
8. Section 194H – Commission or brokerage
Earlier there was tds at rate of 5% from the period april 1, 2024 to september 30, 2024 on amount exceeding ₹15,000 and the same was changed to rate of 2% from period beginning October 1 2024 to March 31, 2025.
Now from april 1, 2025 the amount limit has been also extended to ₹20,000 keeping the rate of 2% constant.
9. Section 194-I – Rent on plant and machinery and other assets
Earlier in case of plant and machinery the rate of tds was 2% and in case of other it was at 10% on amount exceeding ₹2,40,000 during the year and the same has been increased to amount exceeding ₹6,00,000 or ₹50,000 per month or part there of during the finacial year at the same rates.
10. Section 194J – Fee for professional or technical services
Earlier the rate of tds was on amount exceeding ₹ 30,000 at rate of 2% in case of payment to technical services , Royalty for film ,call centre payments etc. and 10% in other cases including director sitting fees of any amount.
Now the same amount limit has been extended to ₹50,000 keeping the other rules constant.
11. Section 194LA – Income by way of enhanced compensation
Earlier the tds was on amount exceeding ₹2,50,000 at rate of 10% now the same rate is applicable but amount has been extended to ₹5,00,000.
(If amount is recieved under Right to fair compensation and trasparency in land acquisition rehabiliation and resettlement act then tds is not applicable.)
12. Section206C(1G) – Remittance under LRS and overseas tour
Earlier the tds was on amount exceeding ₹7,00,000 at rate of 20% now the same rate is applicable but amount has been extended to ₹10,00,000.
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