Introduction to TDS
TDS is a system of tax collection where the payer deducts tax from the payment made to the payee and deposits the deducted tax to the government. The deduction amount gets credited to the payee's income tax liability. TDS is applicable on various types of income, such as salary, interest, commission, rent, professional fees, and more. The TDS system's primary goals are to make sure the government receives a consistent stream of income and to make tax compliance easier for citizens.
The TDS rate chart is a comprehensive guide that lists all the TDS provisions under the Income Tax Act for different categories of taxpayers, such as resident individuals, Hindu Undivided Families (HUF), domestic companies, and non-resident Indians (NRIs) or foreign companies. The chart also includes the latest updates and amendments introduced in the Union Budget 2023.
TDS Rates for Resident Individuals and Hindu Undivided Family (HUF)
The following table provides the TDS rates applicable for resident individuals and HUF for the financial year 2023-24.
|
Section |
Nature of Payment |
Threshold Limit (INR) |
TDS Rate |
|
192 |
Payment of Salary |
Basic exemption limit of employee |
Normal Slab Rates |
|
192A |
Premature withdrawal from EPF |
50,000 |
10% |
|
193 |
Interest on securities |
Varies based on the type of security |
10% |
|
194 |
Payment of Dividend |
5,000 |
10% |
|
194A |
Interest from deposits with banks, post office, co-operative society, etc. |
Senior Citizens: 50,000; Others: 40,000 |
10% |
|
194A |
Interest from other sources (e.g., interest from friends and relatives) |
5,000 |
10% |
|
194B |
Income from lottery winnings, card games, crossword puzzles, etc. |
10,000 |
30% |
|
194BB |
Income from horse race winnings |
10,000 |
30% |
|
194C |
Payment to contractor/sub-contractor |
Single transaction: 30,000; Aggregate transactions: 1,00,000 |
Individuals/HUF: 1%; Others: 2% |
|
194D |
Insurance commission |
15,000 |
10% |
|
194DA |
Payment in respect of a life insurance policy |
1,00,000 |
5% |
|
194EE |
Payment of amount standing to the credit of a person under National Savings Scheme (NSS) |
2,500 |
10% |
|
194F |
Payment for the repurchase of the unit by Unit Trust of India (UTI) or a Mutual Fund |
No limit |
20% |
|
194G |
Payments, commission, etc., on the sale of lottery tickets |
15,000 |
5% |
|
194H |
Commission or brokerage |
15,000 |
5% |
|
194-I |
Rent on (a) Plant and machinery; (b) Land/building/furniture/fitting |
2,40,000 |
(a) 2%; (b) 10% |
|
194-IA |
Payment in consideration of transfer of certain immovable property other than agricultural land |
50,00,000 |
1% |
|
194-IB |
Rent payment by an individual or HUF not covered u/s. 194-I |
50,000 per month |
5% |
|
194-IC |
Payment under Joint Development Agreements (JDA) to Individual/HUF |
No limit |
10% |
|
194J |
Fee for professional services, remuneration/fee/commission to a director, etc. |
30,000 |
10% |
|
194J |
Fee for technical services, royalty towards the sale or distribution, or exhibition of cinematographic films |
30,000 |
2% |
|
194K |
Payment of any income for units of a mutual fund |
No limit |
10% |
|
194LA |
Payment in respect of compensation on acquiring certain immovable property |
2,50,000 |
10% |
|
194M |
Certain payments by Individual/HUF not liable to deduct TDS under Section 194C, 194H, and 194J |
50,00,000 |
5% |
|
194N |
Cash withdrawal exceeding a certain amount |
Co-operative society: 3 Crore; Others: 1 crore |
2% |
|
194N |
Cash withdrawal in case a person has not filed ITR for the last three years and the original ITR filing due date has expired |
20 lakh to 1 crore: 2%; Above 1 crore: 5% |
|
|
194O |
Payment for the sale of goods or provision of services by the e-commerce operator through its digital or electronic facility or platform |
5,00,000 |
1% |
|
194P |
Payment of pension or interest to specified senior citizens of age 75 years or more |
Basic exemption limit of senior citizens or super senior citizens |
Normal tax slab rates |
|
194Q |
Payments for the purchase of goods |
50,00,000 |
0.10% |
|
194R |
Perquisite or benefit to a business or profession |
20,000 |
10% |
|
194S |
TDS on the transfer of virtual digital assets |
Specified Persons: 50,000; Others: 10,000 |
1% |
|
195 |
Income on investments made by NRI citizens |
No limit |
20% |
TDS Rates for Domestic Companies
The following table provides the TDS rates applicable for domestic companies for the financial year 2023-24.
|
Section |
Nature of Payment |
Threshold Limit (INR) |
TDS Rate |
|
193 |
Interest on securities |
Varies based on the type of security |
10% |
|
194 |
Payment of Dividend |
5,000 |
10% |
|
194A |
Interest from deposits with banks, post office, co-operative society, etc. |
40,000 |
10% |
|
194A |
Interest from other sources (e.g., interest from friends and relatives) |
5,000 |
10% |
|
194B |
Income from lottery winnings, card games, crossword puzzles, etc. |
10,000 |
30% |
|
194BB |
Income from horse race winnings |
10,000 |
30% |
|
194C |
Payment to contractor/sub-contractor |
Single transaction: 30,000; Aggregate transactions: 1,00,000 |
Individuals/HUF: 1%; Others: 2% |
|
194D |
Insurance commission |
15,000 |
10% |
|
194DA |
Payment in respect of a life insurance policy |
1,00,000 |
5% |
|
194EE |
Payment of amount standing to the credit of a person under National Savings Scheme (NSS) |
2,500 |
10% |
|
194F |
Payment for the repurchase of the unit by Unit Trust of India (UTI) or a Mutual Fund |
No limit |
20% |
|
194G |
Payments, commission, etc., on the sale of lottery tickets |
15,000 |
5% |
|
194H |
Commission or brokerage |
15,000 |
5% |
|
194-I |
Rent on (a) Plant and machinery; (b) Land/building/furniture/fitting |
2,40,000 |
(a) 2%; (b) 10% |
|
194-IA |
Payment in consideration of transfer of certain immovable property other than agricultural land |
50,00,000 |
1% |
|
194-IB |
Rent payment by an individual or HUF not covered u/s. 194-I |
50,000 per month |
5% |
|
194-IC |
Payment under Joint Development Agreements (JDA) to Individual/HUF |
No limit |
10% |
|
194J |
Fee for professional services, remuneration/fee/commission to a director, etc. |
30,000 |
10% |
|
194J |
Fee for technical services, royalty towards the sale or distribution, or exhibition of cinematographic films |
30,000 |
2% |
|
194K |
Payment of any income for units of a mutual fund |
No limit |
10% |
|
194LA |
Payment in respect of compensation on acquiring certain immovable property |
2,50,000 |
10% |
|
194M |
Certain payments by Individual/HUF not liable to deduct TDS under Section 194C, 194H, and 194J |
50,00,000 |
5% |
|
194N |
Cash withdrawal exceeding a certain amount |
Co-operative society: 3 Crore; Others: 1 crore |
2% |
|
194N |
Cash withdrawal in case a person has not filed ITR for the last three years and the original ITR filing due date has expired |
20 lakh to 1 crore: 2%; Above 1 crore: 5% |
|
|
194O |
Payment for the sale of goods or provision of services by the e-commerce operator through its digital or electronic facility or platform |
5,00,000 |
1% |
|
194P |
Payment of pension or interest to specified senior citizens of age 75 years or more |
Basic exemption limit of senior citizens or super senior citizens |
Normal tax slab rates |
|
194Q |
Payments for the purchase of goods |
50,00,000 |
0.10% |
|
194R |
Perquisite or benefit to a business or profession |
20,000 |
10% |
|
194S |
TDS on the transfer of virtual digital assets |
Specified Persons: 50,000; Others: 10,000 |
1% |
|
195 |
Income on investments made by NRI citizens |
No limit |
20% |
TDS Rates for Non-Resident Indians (NRIs) and Foreign Companies
The following table provides the TDS rates applicable for non-resident Indians (NRIs) and foreign companies for the financial year 2023-24.
|
Section |
Nature of Payment |
Threshold Limit (INR) |
TDS Rate |
|
192 |
Payment of Salary |
Basic exemption limit of employee |
|
|
192A |
Premature withdrawal from EPF |
50,000 |
10% |
|
194B |
Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort |
10,000 |
30% |
|
194BB |
Income by way of winnings from horse races |
10,000 |
30% |
|
194E |
Payment to non-resident sportsman (including an athlete) or an entertainer (not a citizen of India) or non-resident sports association |
No limit |
20% |
|
194G |
Payments, commission, etc., on the sale of lottery tickets |
15,000 |
5% |
|
194LB |
Payment of interest on infrastructure debt fund |
No limit |
5% |
|
194LBA |
Income from units of a business trust |
No limit |
5% (interest income); 10% (dividend income) |
|
194LBC |
Income in respect of investment in securitization fund |
No limit |
30% (for NRIs); 40% (for foreign companies) |
|
194LC |
Payment of interest by an Indian Company or a business trust in respect of money borrowed in foreign currency under a loan agreement or by way of issue of long-term bonds (including long-term infrastructure bond) |
No limit |
5% |
|
194LD |
Payment of interest on rupee denominated bond of an Indian Company or Government securities to a Foreign Institutional Investor or a Qualified Foreign Investor |
No limit |
5% |
|
195 |
Payment of any other sum to a Non-resident |
No limit |
20% (investment income); 10% (long-term capital gains); 15% (short-term capital gains); 30% (other income) |
Union Budget 2023: New TDS Provisions
The Union Budget 2023 introduced several new provisions and amendments to the TDS rates and rules. Some of the key changes are as follows:
Section 194R: TDS on Providing Benefit or Perquisite to Businesses
A new section, 194R, has been introduced to ensure that recipients of benefits or perquisites do not avoid reporting such benefits as income in their Income Tax Return (ITR). Under this provision, TDS must be deducted at 10% on the value or aggregate value of benefits or perquisites provided to any resident for carrying out any business or profession. The threshold limit for TDS deduction under this section is INR 20,000.
Section 194S: TDS on Crypto Income
To ensure the proper reporting and taxation of virtual digital assets, the government has introduced a new provision, Section 194S. Under this provision, TDS must be deducted at 1% by the persons making payment of any sum as consideration for the transfer of virtual digital assets. The threshold limit for TDS deduction under this section is INR 10,000 for most taxpayers, and INR 50,000 for specified persons.
TDS Rate Chart for FY 2021-22
The TDS rate chart for the financial year 2021-22 is provided in the respective sections for resident individuals and HUF, domestic companies, and non-resident Indians (NRIs) and foreign companies mentioned earlier in this article.
TDS Rate Chart for FY 2020-21
In light of the COVID-19 pandemic and its impact on the economy, the government provided relief in TDS rates for the period between 14.05.2020 and 31.03.2021. The relief was limited to TDS rates for resident taxpayers and did not apply to non-resident taxpayers. The TDS rate chart for the financial year 2020-21 is provided in the respective sections for resident individuals and HUF, domestic companies, and non-resident Indians (NRIs) and foreign companies mentioned earlier in this article.
Responsibilities of the Person Deducting TDS
- Obtaining a Tax Deduction Account Number (TAN) and mentioning it in all TDS-related documents.
- Deducting TDS at the applicable rate and depositing the tax deducted to the government account within the stipulated due dates.
- Filing TDS statements (TDS return) periodically within the specified due dates.
- Issuing TDS certificates (Form 16 or Form 16A) to the payee for the TDS deducted by the deductor within the specified due dates.
TDS on Specific Transactions
While TDS is applicable to a wide range of income sources, some specific transactions may have unique TDS provisions. For example, TDS on the sale of immovable property (Section 194-IA) requires the buyer to deduct TDS at 1% if the transaction value exceeds INR 50,00,000. Similarly, TDS on rent payment by an individual or HUF not covered under Section 194-I (Section 194-IB) requires the payer to deduct TDS at 5% if the rent payment exceeds INR 50,000 per month.
Conclusion
Navigate the financial landscape of the fiscal year 2023-24 with ease by mastering the TDS rate chart. Stay compliant with the diverse TDS rates applicable to various income sources, ensuring adherence to the Income Tax Act provisions. Stay informed about the latest amendments and updates through VirtualGGC's expert services. Access online short-term finance courses offered by GGCPTA to enhance your financial knowledge, including topics like GST, income tax, and more. Empower yourself with expertise and stay compliant effortlessly. Join our courses today!
FAQ’s
What is TDS, and how does it work?
TDS (Tax Deducted at Source) is a system of tax collection where the payer deducts tax from the payment made to the payee and deposits the deducted tax to the government. The deduction amount is credited to the payee's income tax liability. TDS is applicable on various types of income, such as salary, interest, commission, rent, professional fees, and more.
What does the TDS rate chart for FY 2023-24 include?
The TDS rate chart for FY 2023-24 is a comprehensive guide that lists all the TDS provisions under the Income Tax Act for different categories of taxpayers, including resident individuals, Hindu Undivided Families (HUF), domestic companies, and non-resident Indians (NRIs) or foreign companies. It also includes the latest updates and amendments introduced in the Union Budget 2023.
What are the TDS rates for resident individuals and HUF in FY 2023-24?
The TDS rates for resident individuals and HUF cover various payments such as salary, interest, dividend, rent, professional fees, and more. Rates vary based on the nature of payment, threshold limits, and other factors.
Are there any new TDS provisions introduced in Union Budget 2023?
Yes, the Union Budget 2023 introduced new provisions and amendments to the TDS rates and rules. Notably, Section 194R was introduced for TDS on providing benefits or perquisites to businesses, and Section 194S was introduced for TDS on crypto income.
What is the threshold limit for TDS under Section 194R for providing benefits or perquisites to businesses?
Under Section 194R, TDS must be deducted at 10% on the value or aggregate value of benefits or perquisites provided to any resident for carrying out any business or profession, with a threshold limit of INR 20,000.
Is there a TDS provision for the transfer of virtual digital assets?
Yes, Section 194S introduced in Union Budget 2023 mandates TDS at 1% on the transfer of virtual digital assets, with a threshold limit of INR 10,000 for most taxpayers and INR 50,000 for specified persons.
What are the responsibilities of the person deducting TDS?
The person deducting TDS is responsible for obtaining a Tax Deduction Account Number (TAN), deducting TDS at the applicable rate, depositing the deducted tax to the government within due dates, filing TDS statements periodically, and issuing TDS certificates to the payee.
How can taxpayers stay updated on TDS provisions and rates?
Taxpayers can stay updated with the latest amendments and updates in TDS rates and provisions by referring to the TDS rate chart for the financial year, keeping track of Union Budget announcements, and reviewing government notifications related to income tax.
