“Stay updated on the revised Tax Deduction at Source (TDS) rates for the fiscal year 2023-24. Explore changes in TDS rates, thresholds, and compliance after the Union Budget 2023.”
TDS (Tax Deduction at Source) is an important compliance requirement for Income Tax Assesses. Several parts of the Income Tax Act provide various TDS rates, payment forms, and TDS threshold limitations. TDS has undergone substantial adjustments as a result of Budget 2023. These modifications include raising the maximum for TDS on cash withdrawals supplied to co-operative societies to 3 crores, eliminating the minimum threshold of INR 10,000 for TDS on online gaming, and lowering the TDS rate from 30% to 20% on the taxable share of EPF withdrawals in non-PAN situations. This blog provides a table of the various TDS rates applicable for the Fiscal Year (FY) 2023-2024 or Assessment Year (AY) 2024-2025.
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TDS changes in the Union Budget 2023-24:
Several changes and modifications have been made to the TDS Rate Chart for FY 2023-2024/AY 2024-2025. These modifications are as follows:
- Section 194BA: TDS introduced on profits from online gaming, effective April 1, 2024.
- Section 196A: Non-residents generating income from mutual funds in India can present a Tax Residency Certificate beginning April 1, 2023, to get TDS at the rate specified in the tax treaty, rather than the flat rate of 20%.
- Section 192A: For workers who do not have a PAN, the TDS rate on PF withdrawals has been decreased from the highest marginal rate to 20%.
- Section 193: Interest on listed debentures shall not be free from TDS. As a result, interest in such designated securities must be taxed.
- Section 194N: The TDS threshold on cash withdrawals from cooperative societies has been raised. The tax would be deducted on cash withdrawals exceeding Rs 3 crore beginning April 1, 2023, up from the previous maximum of Rs 1 crore.
What is TDS (Tax Deducted at Source)?
TDS is a term for tax deducted at source. The Income Tax Act requires any corporation or individual making a payment to deduct tax at the source if the payment exceeds specific threshold limitations. TDS must be deducted at the tax department’s approved rates.
TDS Rate Chart for the Fiscal Year 2023-24 and Assessment Year 2024-25
| Section of the Income-tax Act | Nature of Payment | Rate of TDS | Threshold (INR) | Remarks |
| 192 | Salary Payment | Normal slab rates or New Tax Regime Slab Rates as opted by the employee | Taxable Income that is liable to tax | Basic exemption limit for employees |
| 192A | Premature withdrawal from EPF | 10% | 50,000 | The second clause in Section 192A of the Act, which would cause tax to be deducted, is proposed to be removed. The act’s second clause, which would cause tax to be withheld at a rate of 20% rather than the top marginal rate if the individual failed to produce their PAN for payment of their outstanding amount, is being suggested to be removed. This modification would take effect in the Assessment Year 2023–2024. |
| 193 | Interest on Securities | 10% | 2500 | According to the proposal, the proviso to Section 193 of the Act’s clause should be removed. As a result, beginning on April 1, 2023, interest payments made on listed debentures to residents will no longer be free from TDS. |
| 194 | Dividend | 10% | 5000 | – |
| 194A | Interest other than interest on securities (Bank Deposit/Post office Deposit/Banking Co-Society Deposit)
A) Senior Citizens B) Others |
10% | 50000
40000 |
– |
| 194A | Interest other than interest on securities (other than Bank Deposit/Post Office Deposit/ Banking Co-Society Deposit) | 10% | 5000 | |
| 194B | Winnings from lotteries, crossword puzzles, card games, and other game | 30% | 10000 | The TDS threshold limit of 10,000 will continue to be in effect for games like the lottery, crosswords, and other similar ones, but it will now only apply to the total wins accrued over the course of a fiscal year. A proposal to change Section 194B will also take effect on July 23. With the revision, this clause will no longer apply to online gaming, which will be covered by a new section 194BA. |
| 194BA | Winning from Online Games | 30% | Nil | According to the proposed amendment, any person who is in charge of providing income to another person in the form of winnings from an online game throughout a fiscal year is required to deduct income tax on the net earnings that are still in the user account at the end of the fiscal year. The way the calculation is done must be specified. However, if a withdrawal is made from the user account during the fiscal year, income tax will be withheld both at the time of the withdrawal for any net winnings included in the withdrawal amount and at the end of the fiscal year for any net winnings still in the user account. |
| 194BB | Income earned from winning in horse races | 30% | 10000 | The TDS threshold limit of 10,000 will remain in effect, but it will now only apply to total wins throughout of a fiscal year. |
| 194C | Payment of Contractors and sub-contractors | 1% (Individual/HUF)
2% (Others) |
Single Transaction: 30,000/Aggregate of Transactions: 1,00,000 | – |
| 194DA | Payment in respect of life insurance policy | 5% | 100000 | – |
| 194E | Payment to non-resident sportsmen/sports association | 20% | – | The rate of TDS shall be increased by applicable surcharge and health & Education cess. |
| 194EE | Payments in respect of deposits under the National Savings Scheme | 10% | 2500 | – |
| 194F | Payments on account of re-purchase of units by Mutual Funds or UTI | 20% | – | |
| 194G | Commission, prize, etc., on sale of lottery tickets | 5% | 15000 | – |
| 194H | Commission or brokerage | 5% | 15000 | – |
| 194-I(a) | Rent for plant and machinery | 2% | 240000 | – |
| 194-I(b) | Rent for immovable property | 10% | 240000 | – |
| 194-IA | Payment for acquisition of immovable property other than agricultural land | 1% | 50 lakhs | One percent of the amount paid to or credited to the resident, or the property’s stamp duty value, whichever is larger, is to be deducted as TDS. No tax is to be subtracted if the sum of the consideration paid for the transfer of real estate and the stamp duty value of such real estate is less than fifty lakh rupees. |
| 194-IB | Payment of rent by individual or HUF | 5% | 50000 per | – |
| 194-IC | Payment for Joint Development Agreements | 10% | – | |
| 194J | Fee for professional or Technical Services (FTS), Royalty, ETC. | 2% (FTS, certain royalties, call center)
10% (others) |
30000 | – |
| 194K | Payment of dividends by Mutual Funds | 10% | – | – |
| 194LA | Payment of Compensation on acquisition of immovable property | 10% | 250000 | – |
| 194LBA (1) | Payment of income by Business trust | 10% | – | |
| 194LBB(i) | Payment of income by Investment Fund | 10% | – | |
| 194LBC (1) | Income by the securitization trust | 25% (Individual/HUF)
30% (others) |
– | |
| 194M | Payment to the commission, brokerage, etc. by Individual and HUF | 5% | 50 lakhs | – |
| 194N | Cash withdrawal during the previous year from one or more accounts maintained by a person with a banking company, cooperative society engaged in the business of banking or a post office | 2% / 5% | 20 lakhs / 1 Crore | – |
| 194-O | TDS on e-commerce participants | 1% | 5 lakhs | In case of non-availability of PAN, TDS Rate shall be 5% |
| 194P | TDS on Senior Citizens above 75 Years | Tax Rates in Force | Taxable Income Liable to Tax | – |
| 194Q | Purchase of goods (applicable w.e.f 01.07.2021) | 0.10% | 50 lakhs | – |
| 194R | TDS on benefit or perquisite of a business or profession | 10% | 20000 | – |
| 194S | Transfer of Virtual Digital Assets | 1% | ||
| 195 | Payment of any other sum to a Non-resident | The rate of TDS shall be increased by applicable surcharge and Health & Education cess. | ||
| 195 | (a) Investment made by a Non-resident Indian Citizen | 20% | – | |
| 195 | (b) Long-term capital gains referred to in Section 115E in case of a Non-resident Indian Citizen | 10% | – | |
| 195 | (c) Long-term capital gains referred to in sub-clause (3) of clause (c) of sub-section (1) of Section 112 | 10% | – | |
| 195 | (d) Long-term capital gains as referred to in Section 112A | 10% | – | |
| 195 | (e) Short-term capital gains referred to in Section 111A | 15% | – | |
| (f) Any other income by way of long-capital gains | 20% | – | ||
| (g) Income by way of interest payable by the Government or an Indian concern on money borrowed or debt incurred by the Government or the Indian concern in foreign currency (not being income by way of interest referred to in Section 194LB or Section 194LC) | 20% | – | ||
| (h) Any other Income | 30% | |||
| 196B | Income from units from an offshore fund | 10% | ||
| 196C | Income from foreign currency bonds or GDR of an Indian company | 10% | ||
| 196D | Income of Foreign Institutional investors from securities | 20% | ||
| 206AB | Payment to non-filers, i.e., those who have not filed there in the last year | -2 times the rate given in the Income Tax Act or Finance Act or -5%, whichever is higher | – | Non-filers do not include: –
– People who are not required to file their ITRs – NRs who do not have a PE in India |
| 206AA | TDS rate in case of Non availability of PAN | Rates specified above or 20% whichever is higher | – | – |
Conclusion: –
TDS under Goods and Services Tax (GST) is needed to be deducted at the rate of 2% on payments made to taxable goods and/or services suppliers by certain specified individuals under GST. Within 10 days after the end of the month, the individual deducting tax must file a TDS return on form GSTR-7. This blog discusses all TDS under GST, including the TDS rate, deduction limit, application, papers to be filed, relevant interest and penalties, and more.
Author Bio
its a Threshold limit for every year therefore in 2023-24 also tds will be deducted after 50 lakh
If tds u/s 194 Q deducted in previous year 2022-23 as threshold limit of Rs. 50 lakh cross, then for this FY 2023-24 shall we wait till Rs. 50 lakh cross or we started deducting tds from Rs. 1/-?
Very useful