TDS, or Tax Deduction at Source, is a vital income tax compliance. Failure to deduct or insufficient deduction incurs penalties. This article covers payments subject to TDS, applicable rates, and key amendments from the Finance Act, 2023. we share the Latest TDS rate chart for FY 2023-24 and Assessment Year 2024-25.
| Section | Nature of Payment |
Threshold Limit (INR) |
Rate of TDS |
| 192 | Salary | Taxable income liable to income tax | As per normal or new tax regime slab rate chosen by the employee |
| 192A | Premature withdrawal from Employees’ Provident Fund | ₹50,000 | 10% |
| 193 | Interest on securities | ₹2,500 | 10% |
| 194 | Dividend | ₹5,000 | 10% |
| 194A | Interest (other than interest on securities) | Bank deposit/ banking co-operative society deposits/ post office deposit – ₹50,000 (senior citizens) / ₹40,000 (others); Deposits (other than above) – ₹5,000 | 10% |
| 194B | Winning from lottery/ crossword puzzle | ₹10,000 | 30% |
| 194BA | Winning from online games | – | 30% |
| 194BB | Winning from horse race | ₹10,000 (threshold applies to aggregate winning during the Financial Year) | 30% |
| 194C | Payments to contractors | Single transaction – ₹30,000; Aggregate of transactions – ₹1,00,000 | Individuals/ HUF – 1%; Others – 2% |
| 194D | Insurance commission | ₹15,000 | Individuals – 5%; Companies – 10% |
| 194DA | Payment relating to life insurance policy | ₹1,00,000 | 5% |
| 194E | Payment to non-resident sportsmen/ sports association | – | 20% |
| 194EE | Payments relating to deposits under NSS (National Savings Scheme) | ₹2,500 | 10% |
| 194F | Payment towards repurchase of unit by Unit Trust of India/ Mutual Fund | – | 20% |
| 194G | Commission/ prize etc. on sale of the lottery tickets | ₹15,000 | 5% |
| 194H | Commission/ brokerage | ₹15,000 | 5% |
| 194-I | Rent | ₹2,40,000 | Plant and machinery – 2%; Land/ building/ factory/ furniture/ fittings – 10% |
| 194-IA | Payment towards transfer of certain immovable property (other than agricultural land) | ₹50 Lakhs | 1% |
| 194-IB | Payment of rent by HUF/ individual (not liable to tax audit) | ₹50,000 per month | 5% |
| 194-IC | Payment under JDA (Joint Development Agreement) | NIL | 10% |
| 194J | FTS (Fees for Professional or Technical Services) | ₹30,000 | Fees for technical services/ specified royalties – 2%; Others – 10% |
| 194K | Income relating to specified units | ₹5,000 | 10% |
| 194LA | Payment towards compensation for acquisition of certain specified immovable property [land (other than agricultural land)/ building or part thereof] | ₹2,50,000 | 10% |
| 194LB | Income relating to interest from infrastructure debt fund | NIL | 5% |
| 194LBA | Income from the units of business trust | NIL | 10% |
| 194LBB | Income from units of investment funds | NIL | 10% |
| 194LBC | Income relating to investment in securitization trust | NIL | Individuals/ HUF – 25%; Others – 30% |
| 194LC | Income relating to interest from Indian Company/ business trust | NIL | 5% |
| 194LD | Income relating to interest on certain specified bonds/ government securities | NIL | 5% |
| 194M | Payment of certain sums (i.e. commission/ brokerage/ fees for professional | ₹50 Lakhs | 5% |
| 194N | Payment of certain amounts in cash i.e. cash withdrawals | ₹20 Lakhs (recipient not furnished ITR for three previous years) / ₹1 crore (others) | Exceeding ₹20 Lakhs – 2%; Exceeding ₹1 crore – 5% |
| 194-O | Payment of sum by an e-commerce operator to participant | ₹5 Lakhs | 1% |
| 194P | Tax deduction in case of senior citizen of 75 or more years age | Taxable income liable to tax | As per rates in force |
| 194Q | Payment towards purchase of goods | ₹50 Lakhs | 0.10% |
| 194R | Benefit/ perquisite in respect of business/ profession | ₹20,000 | 10% |
| 194S | Payment relating to transfer of virtual digital asset | Payment by specified person – ₹50,000; Any other person – ₹10,000 | 1% |
| 195 | Payment of any other amount/ sum to a non-resident | – | Income relating to investment done by a non-resident Indian Citizen – 20%; Other specified incomes – As per rates in force |
| 206AA | TDS deduction in case PAN of deductee not furnished | – | Higher of rates specified in relevant section, rates in force, or 20% |
| 206AB | TDS deduction in case of non-filers of income tax return | – |
Higher of twice the rates specified in relevant section, twice the rate/ rates in force, or 5% |
- Section 194BA – TDS on Online Gaming:
- Online gaming platforms now must deduct TDS at a rate of 30% on any winnings exceeding Rs. 100 per player.
- This applies to all forms of online gaming, including games of skill and chance.
- Section 196A – Reduced TDS Rate as per Tax Treaty:
- Allows for a lower TDS rate if a tax treaty between India and another country specifies a lower rate for a particular income category.
- This can help reduce tax liability for those eligible under such treaties.
- Section 192A – Relaxation for Employees without PAN:
- Employers can now deduct TDS at a higher rate of 20% (instead of 30%) from employees who do not have a PAN.
- This provides some relief to employees who are in the process of obtaining a PAN.
- Section 193 – Tax Deduction on Interest from Specified Securities:
- TDS now applies to interest earned on certain specified securities, such as zero-coupon bonds and deep discount bonds.
- Section 194N – Increased TDS Threshold for Cooperative Societies:
- The threshold for TDS deduction on payments made to cooperative societies has been raised from Rs. 50 lakhs to Rs. 1 crore.
- Section 194R – Clarification on TDS Deductions for Benefits or Perquisites:
- Provides clarity on the applicability of TDS on various benefits or perquisites provided by businesses to their employees or other recipients.
- New Section 155(20) – Credit of TDS in the Year of Income Reporting:
- Ensures that TDS credit is granted in the same year in which the income is reported, preventing any delays in tax benefits.
FAQ
What is the TDS rate for FY 2023-24?
The TDS rate depends on the nature of the income and other factors like PAN availability. Here are some common rates: 1. Interest from bank deposits and other sources: 10% (with PAN), 20% (without PAN) 2. Salary: Progressive rates based on income slabs 3. Rent: 10% (exceeding Rs. 2.5 lakhs per year) 4. Contract payments: 1% (individuals/HUFs with PAN), 2% (others) 4. Professional fees: 10% (exceeding Rs. 20,000)
What is the TDS limit for FD interest in 2023-24?
There is no separate TDS limit for FD interest. The same general rates apply as mentioned above: 10% with PAN, 20% without PAN.
What is the present rate of tax on TDS?
The rate of tax for TDS deductions depends on the type of income and not on a separate TDS tax rate. As mentioned earlier, common rates for various income sources range from 1% to 30%.
What is the TDS limit per year?
There is no single annual limit for TDS. It applies based on specific thresholds or exceeding certain amounts for different income categories, like rent exceeding Rs. 2.5 lakhs per year.
What is the TDS exemption limit?
TDS exemption limits also vary depending on the income source and specific conditions. For example, interest income from bank deposits up to Rs. 10,000 per year is exempt from TDS if PAN is provided.
