Tax Deductions

An Overview of TDS/TCS Rate Financial Year 2023-24 (AY: 2024-25)

Complying with Tax Deduction at Source (TDS) is essential for individuals subject to Income Tax. The Income Tax legislation outlines various sections that specify different TDS rates, payment methods, and threshold limits.

Krishna Gopal Varshney

An editor at Myitronline

May 04, 2024
5 min read
2012 Likes
11381 Views

The Budget 2023 has introduced notable modifications regarding TDS, such as raising the limit for TDS on cash withdrawal to co-operative societies to 3 crores and detaching the Rs. 10,000 minimum thresholds for TDS related to online gaming.

Additionally, in non-PAN cases, the TDS rate for the taxable portion of EPF withdrawal has been reduced from 30% to 20%.

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Section of the income tax act	Payment Nature	Threshold Limit (Rs.)	TDS (Individual/HUF)	Other
192	Salaries	Basic exemption limit of employee	Normal Slab rates	-
192A	Premature withdrawal From EPF	50,000	10%	-
193	Interest on securities	10,000	10%	10%
194	Dividends	5,000	10%	10%
194A	Interest (banks)	40,000	10%	10%
194A	Interest (others)	5,000	10%	10%
194A	Senior citizen	50,000	10%	-
194B	Winning from lotteries	10,000	30%	30%
194BA	Winning from online games	-	30%	30%
194BB	Winning from horse race	10,000	30%	30%
194BP	Payments made in the form of lotteries or crossword puzzles, whether in cash or kind, will not be sufficient to meet the tax liability, even if paid in advance.	10,000	30%	30%
194C	Contractor - Single Transaction	30,000	1%	2%
194C	Contractor - During the Financial year	1,00,000	1%	2%
194C	Transporter (44AE) declaration with PAN	-	-	-
194D	Insurance Commission (15G-15H allowed)	15,000	5%	10%
194DA	Life-insurance policy	1,00,000	1%	1%
194EE	NSS	2500	10%	10%
194F	Repurchase Units by MFs	-	20%	20%
194G	Commission – Lottery	15,000	5%	5%
194H	Commission / Brokerage	15,000	5%	5%
194I(a)	Rent of Plant / Machinery / Equipment	2,40,000	2%	2%
194I(b)	Rent of Land Building & Furniture	2,40,000	10%	10%
194IA	Transfer of some movable property, excluding agriculture	50 lakhs	1%	1%
194IC	Payments made under an agreement that is applicable specifically from the fiscal year 2017-18 and beyond.	No limit	10%	10%
194J(a)	Fees-tech srvcs, call centre, royalty for sale, etc.	30,000	2%	2%
194J(b)	Fee for professional service or royalty etc.	30,000	10%	10%
194K	Payment of dividend by mutual Funds	5000	10%	10%
194LA	Payment received for the transfer of certain types of immovable property, excluding agricultural land."	2,50,000	10%	10%
194LA	Immovable Property (TDS exempted under RFCTLARR Act {Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013} with effective from 01.04.2017	No limit	-	-
194LA	Immovable Property	2,50,000	10%	10%
194LB	Earnings in the form of interest from an infrastructure debt fund by a non-resident individual.	No limit	5%	5%
194LBA	Some income from business trust (applicable from 01 October 2014)	No limit	10%	10%
194LBA	Some income from a business trust to non-resident (applicable from 01 October 2014)	No limit	5%	5%
194LBB	This refers to any income that is earned in relation to the investments made by an investment fund.	No limit	30% For non-residents & 10% for residents	40% For non-residents & 10% for residents
194LBC	Income derived from an investment in a securitization trust.	No limit	25% for individual & HUF. 40% For non-residents. 30% for residents	25% for individual & HUF. 40% For non-residents. 30% for residents
194LC	Starting from July 1st, 2012, any income generated in the form of interest by an Indian specified company to a foreign company or non-resident, on a foreign currency approved loan or a long-term infrastructure bond from outside of India, will be subject to certain regulations.	No limit	5%	5%
194LD	Interest on certain bonds and Govt. Securities (from 01.06.2013)	No limit	5%	5%
194M	Payment to the commission, brokerage, etc. by individual & HUF	50,00,000	5%	5%
194N	As of September 1st, 2019, any individual who withdraws more than 1 crore rupees in cash during the previous year from one or multiple accounts with a bank or co-operative society will be subject to certain regulations.	1 crore	2%	2%
194NF	Payment of spoke amounts in cash to non-filers	2000000	2%	2%
194NF	Payment of some amounts in cash to non-filers	10000000	5%	5%
194O	TDS on e-commerce participants	5,00,000	1% (1st October 2020)	1% (1st October 2020)
194P	TDS in case of Specified Senior Citizen		Not Applicable	Noraml slab rates
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	20,000	10%	10%
194RP	If a business or profession provides benefits or perquisites to their employees in kind, or if a partial cash payment is insufficient to cover the tax liability, then the applicable taxes that need to be deducted must be paid before such benefits can be released.	20,000	10%	10%
194S	When a transfer of a virtual digital asset occurs, and it is not being carried out by specified persons, a payment of consideration is made.	10,000	1%	1%
195SP	The transfer of a virtual digital asset can be paid for through a non-monetary exchange or by exchanging it for another virtual digital asset. However, in order for the payment to be released, the applicable taxes that need to be deducted must be paid beforehand.	10,000	1%	1%

TDS Rates without PAN – 20% flat (if TDS is lower than 20%)

The majority of relevant sections for domestic transactions are included in the aforementioned list.
Section 206 - Regardless of any other provisions stated in the Income Tax Act-1961, any individual or entity who is due to receive a sum, income, or amount subject to tax deduction under Chapter XVIIB (hereafter referred to as the "deductee"), must provide their Permanent Account Number (PAN) to the individual or entity responsible for deducting the tax (i.e. "deductor"). Failure to do so will result in tax being deducted at the higher of the following rates: (i) at 20% rate (ii) at the applicable rates (iii) Specified rates in the relevant provision of this act.

In cases where tax deduction is mandatory under section 194-O, clause (iii) shall apply with the substitution of the phrase "five percent" for "20%".

Furthermore, in cases where tax deduction is required under section 194Q, clause (iii) will be applicable with the substitution of the phrase "five percent" instead of "20%".

Irrespective of any other provisions outlined in the Income Tax Act-1961, if the tax deduction is mandatory under the provisions of Chapter XVIIB (excluding sections 192, 192A, 194B, 194BB, 194LBC, or 194N) on any income, sum, or amount paid, or credited by an individual to a specified person, the tax shall be deducted at the following rates:––

at 5% rate
at a rate twice the amount specified in the relevant provision of the Act;
at double of the applicable rates

If a specified person is subject to the provisions of section 206AA, the tax shall be deducted at the higher of the two rates prescribed in this section and section 206AA.

The term "specified person" in this section refers to an individual who has not filed income tax returns for both of the two assessment years that are relevant to the two previous years just before the previous year in which tax deduction is required. Additionally, the individual must have exceeded the time limit for filing income tax returns under sub-section (1) of section 139, and the total amount of tax deducted at source and tax collected at source in their case must be fifty thousand rupees or more for each of these two previous years.

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TDS RATE CHART (FOREIGN) FY: 2023-24 (AY: 2024-25)

Section

Nature of payment

Threshold limit (Rs)

HUF/Individual

Others

Existing Rates of TDS

195	Payment to Non-residents	-	0%	0%
194E	Non-resident Sportsman or Sports Assn	-	20%	20%
196B	Units held by Off-shore Fund	-	10%	5%
196C	Income from Foreign Currency Bonds	-	5%	5%
196D	Income of FII on Securities	-	20%	20%
196DA	Income of specified fund from securities	-	10%	10%
194LB	Interest from infrastr. debt fund payable to non-resident	-	5%	5%
194LC	Interest from specified company payable to non-resident	-	5%	5%
194LD	Interest on certain bonds and govt securities	-	5%	5%
194LBA	income from units of a trust/business trust	-	5%	5%
194LBB	Income on units of Investment Fund	-	30%	40%
104LBC	Income earned from investing in a securitization trust.	-	30%	40%
194N	Payment of certain amounts in cash	-	2%	2%
194LBA(a)	Income specified in section 10(23FC)(a) from units of trust/business	-	10%	10%
194LBA(b)	Income specified in section 10(23FC)(b) from units of a trust/business	-	5%	5%
194NF	Making cash payments to non-filers for certain amounts.	-	1%	1%
194LBA(c)	Income specified in section 10(23FCA) from units of trust/business	-	30%	30%
192A	Payment against EPF Scheme	30,000	10%	10%

TDS / TCS Rate Financial Year 2023-24 (AY: 2024-25)

Section	Nature of Payment	TCS Rate
206CE	Scrap	1
206CI	Tendu leaves	5
206CB	Timber received under forest lease including other mode	2.5
206CF	Parking Space	2
206CG	Toll Plaza	2
206CH	Quarrying & Mining	2
206Cj	Minerals	1
206CL	Sale of Motor Vehicle	1
206CK	Jewellery & Bullion	1
206CM	Sale on any goods in cash excluding bullion	1
206CN	Providing of any service excluding Ch-XVII-B	1
206CQ	Other sources - Liberalized Remittance Scheme	5% ( 10% for non-Aadhar & PAN)
206CO	Tour Program Package	5% ( 10% for non-Aadhar & PAN)
206CR	Sale of Goods	0.1(1% for non-Aadhar & PAN)
206CC	Timber received under any other mode excluding forest lease	2.5
206CP	Educational Loans - Financial Institution - Liberalized Remittance Scheme	0.5

Note: TCS rate: Double of TCS rate as above or 5%, whichever is higher {Without PAN}.

The aforementioned table includes many sections applicable on domestic transactions
Section 206CC - Regardless of any other provisions in the Income Tax Act-1961, an individual who pays a sum or amount subject to tax collection at source under Chapter XVII-BB (referred to as the "collectee") needs to furnish his/her PAN number to the person responsible for deducting for the same tax.

Failure to do so will result in tax being collected at the higher of the following rates:

At 5% rate
At the rate of twice as specified in provision of such act

This provision is not applicable to a non-resident who do not have any permanent residence/establishment in the country.

Section 206CC - Regardless of any other provisions in the Income Tax Act-1961, if tax collection at source is mandatory under the regulations outlined in Chapter XVII-BB, on any sum, amount or income obtained from another specified individual by an individual (referred to as the "collectee") from a specified individual, tax will be deducted at the following rates:

(i) At the rate of twice as specified in provision of such act

(ii) At 5%

In case the regulations outlined in section 206CC are applicable to a particular individual, the tax will be collected at the higher of the two rates specified in both this section and section 206CC.

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In this section, the term "specified person" refers to an individual who has not submitted income tax returns for both of the two assessment years relevant to the two years preceding the previous year in which tax collection is necessary, and the time limit for filing the income tax return under sub-section (1) of section 139 has elapsed.

Furthermore, the total of tax withheld at source and tax collected at source is equal to or more than Rs. 50,000 for each of these two preceding years. However, it is important to note that a non-resident who does not have a permanent establishment in India is not included in the definition of "specified person".

Also, Read: "Taxability Of Gifts Received By Individual Or HUF Member U/S 56,2".

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Krishna Gopal Varshney

An editor at Myitronlinenews

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