What are the TDS Rates applicable for FY 2023-24?
Introduction
TDS, or Tax Deducted at Source, is an essential concept in the realm of taxation. It pertains to the practice of collecting taxes from various sources of income, such as salary, rent, dividends, and more before the payee receives the amount. For the financial year 2023-24, understanding the TDS rate chart is crucial to ensure accurate tax compliance and TDS Return Filing. Let’s delve into the intricacies of the TDS rate chart for FY 2023-24, deciphering its implications and significance.
TDS Rates in India: A Quick Overview
In India, the TDS rates are meticulously defined by the Income Tax Act. These rates are also upated on the income tax website annually. These rates vary based on the nature of the transaction, the payee’s residency status, and the specific provisions of the Act. The primary objective of TDS is to ensure a steady stream of tax revenue for the government and simplify the taxation process. For the financial year 2023-24, the TDS rate chart encapsulates a wide spectrum of transactions, ranging from salary payments to dividends and more.
TDS Rate Charts for FY 2023-24
Let’s take a closer look at some of the key TDS rates for the financial year 2023-24:
- Firstly, comes Section 192, which deals with the payment of Salary
- TDS Rate: Normal Slab Rates
- After that, comes Section 192A. This section deals with premature withdrawal from EPF
- TDS Rate: If there is a PAN, then: 10%
- TDS Rate: If there is no PAN, then: 20%
- Next comes Section 193, which deals with interest on Securities
- TDS Rate: 10%
- After that another important section is section 194 for payments of Dividend
- TDS Rate: 10%
- Then there is Section 194A for Interest other than interest from securities
- TDS Rate: 10%
- Then there is Section 194B for Income from lottery winnings, card games, etc.
- TDS Rate: 30%
- After that, there’s section 194BA for income from online games
- TDS Rate: 30%
- Finally, there is Section 194C for payment to the contractor/sub-contractor
- TDS Rate: Individuals/HUF – 1%
- TDS Rate: Others – 2%
These are just a few examples from the extensive TDS rate chart for FY 2023-24. The rates vary depending on the transaction type and the payee’s characteristics. Hence, it’s crucial to understand these rates to ensure accurate tax deduction and submission.
All TDS Rate Chart: A Holistic View
For a complete understanding of TDS rates for FY 2023-24, it’s essential to consider all relevant sections and transactions. Whether it’s TDS on payment of salary, interest, dividends, or other transactions, the rates play a critical role in ensuring tax compliance. Stay informed about the latest updates in the TDS provisions to avoid any penalties or discrepancies.
Section 192
| Section | Nature of Transaction | TDS Rate |
|---|---|---|
| 192 | Payment of Salary | Normal Slab Rates |
| 192A | Premature withdrawal from EPF | With PAN: 10%; Without PAN: 20% |
Section 193
| Section | Nature of Transaction | TDS Rate |
|---|---|---|
| 193 | Interest on Securities | 10% |
Section 194
| Section | Nature of Transaction | TDS Rate |
|---|---|---|
| 194 | Payment of Dividend | 10% |
| 194A | Interest other than interest from securities | 10% |
| 194B | Income from lottery winnings, card games, crossword puzzles, etc. | 30% |
| 194BA | Income from online games | 30% |
| 194BB | Income from horse race winnings | 30% |
| 194C | Payment to contractor/sub-contractor | For Individuals/HUF: 1%; For others: 2% |
| 194D | Insurance commission | For Domestic Companies: 10%; For other Companies: 5% |
| 194DA | Income in respect of life insurance policy | 5% |
| 194E | Payment to non-resident sportsmen/sports association | 20% + Surcharge + 4% Cess |
| 194EE | Payment under National Savings Scheme (NSS) | 10% |
| 194F | Payment for the repurchase of the unit by UTI or a Mutual Fund | 20% |
| 194G | Payments on sale of lottery tickets | 5% |
| 194H | Commission or brokerage | 5% |
| 194-I | Rent | Rent on Plant and Machinery: 2%; Rent on Land/Building/Furniture/Fitting: 10% |
| 194-IA | Payment in consideration of transfer of immovable property | 1% |
| 194-IB | Rent payment by individual or HUF not covered u/s. 194-I | 5% |
| 194-IC | Payment under Joint Development Agreements (JDA) to Individual/HUF | 10% |
| 194J | Payment for professional or technical services | 10% |
| 194K | Payment of income for units of a mutual fund | 10% |
| 194LA | Payment in respect of compensation on acquiring certain immovable property | 10% |
| 194LB | Payment of interest on infrastructure debt fund to Non-Resident | 5% + Surcharge + 4% Cess |
| 194LC | Payment of interest on foreign currency loans or bonds | 5% |
| 194LD | Payment of interest on rupee-denominated bonds to FII or QFI | 5% |
| 194M | Certain payments by Individual/HUF | 5% |
| 194N | Cash withdrawal from a banking company, co-operative society, or post office | Co-operative Society: 2% (if cash withdrawal exceeds Rs 3 crore); For others: 2% (if cash withdrawal exceeds Rs 1 crore) |
| 194O | Payment for the sale of goods or provision of services by an e-commerce operator | With PAN: 1%; Without PAN: 5% |
| 194P | Payment of pension or interest to specified senior citizens | Normal tax slab rates |
| 194Q | Payments for the purchase of goods | 0.10% |
| 194R | Prerequisite or benefit to a business or profession | 10% |
| 194S | TDS on the transfer of virtual digital assets | Specified Persons: 1%; For others: 1% |
Section 195
| Section | Nature of Transaction | TDS Rate |
|---|---|---|
| 195 | Income on investments made by NRI citizen | 20% |
| 195 | Income by way of LTCG referred to in section 115E in the case of NRI | 10% |
Budget 2023 Updates and Their Impact on TDS Rates
The Budget 2023 brought several significant updates to the TDS provisions, affecting various transactions. For instance, Section 194N saw an increase in the threshold for cash withdrawal by cooperative societies. The TDS rate on income from online gaming, covered under Section 194BA, remains at 30%. Additionally, Section 194S introduced TDS on the transfer of virtual digital assets, where the TDS rate stands at 1%.
Conclusion
In conclusion, the TDS rate chart for FY 2023-24 serves as a roadmap for accurate tax deduction and submission. By comprehending the nuances of TDS rates across various transactions and staying updated with the latest amendments, individuals and businesses can effectively navigate the taxation landscape and contribute to the nation’s revenue while abiding by the law.
Frequently Asked Questions
What is TDS, and why is it deducted?
TDS, or Tax Deducted at Source, is a mechanism where tax is deducted at the time of payment itself. This ensures a steady inflow of revenue for the government and encourages timely tax compliance.
How are TDS rates determined for different transactions?
TDS rates are defined by the Income Tax Act and vary based on the nature of the transaction, payee’s residency status, and specific provisions of the Act.
Are there any changes in TDS rates for FY 2023-24 compared to the previous year?
Yes, the Budget 2023 introduced several updates in TDS rates. For example, TDS on cash withdrawal by co-operative societies and on income from online gaming saw changes in threshold limits and rates, respectively.
Is TDS applicable to all types of income?
TDS is applicable to various types of income, including salary, interest, dividends, winnings from games, and more. The specific applicability and rates depend on the nature of the income.
How do I determine the appropriate TDS rate for a specific transaction?
The TDS rate for each transaction is specified in the Income Tax Act. You can refer to the TDS rate chart for FY 2023-24 to find the applicable rate for your transaction.
Monjima Ghosh
Monjima is a lawyer and a professional content writer at LegalWiz.in. She has a keen interest in Legal technology & Legal design, and believes that content makes the world go round.
