New TDS Rates FY 2024-25

Tds Rate
New TDS Rates FY 2024-25 2

The Finance Act, 2024, has introduced a new Tax Deducted at Source (TDS) rate for the financial year 2024-25 (from April 1, 2024, to March 31, 2025). Using the correct TDS rate is important for businesses to ensure proper tax compliance and avoid penalties.

New TDS chart – Financial Year 2024-25

SectionNature of PaymentThresholdIndividual’s TdsOthers-Tds
194CPayments to the contractor – Aggregate PaymentRs. 30,0001%2%
194CPayments to contractor – Aggregate PaymentRs. 1,00,0001%2%
194IRent of land, building, or furnitureRs. 2,40,00010%10%
194IRent of plant and machineryRs. 2,40,0002%2%
194IAPayment for transfer of immovable property other than agricultural landRs. 50,00,0001%1%
194IBRent payment that is made by an individual or HUF not covered under payment 194IRs. 50,000 (per month)5%NA
194JFees paid for professional servicesRs. 30,00010%10%
194JAmount paid for technical servicesRs. 30,0002%2%
194QPayments made for the purchase of goodsRs. 50,00,0000.10%0.10%
194HCommission or brokerageRs. 15,0005%5%
192Salary tax/Tds depends as per income-slabIncome-SlabOld-RateNew-Rate
192Salary Incomefrom 2,50,001 to 3,00,0005%NIL
192Salary Incomefrom 3,00,001 to 5,00,0005%5%
192Salary Incomefrom 5,00,001 to 6,00,00020%5%
192Salary Incomefrom 6,00,001 to 7,50,00020%10%
192Salary Incomefrom 7,50,001  to  9,00,00020%10%
192Salary Incomefrom 9,00,001 to 10,00,00020%15%
192Salary Incomefrom 10,00,001 to 12,00,00030%15%
192Salary Incomefrom 12,00,001 to 12,50,00030%20%
192Salary Incomefrom 12,50,001 to 15,00,00030%20%
192Salary Incomeabove 15,00,00030%30%
192Zero-tax on Salary IncomeRebate (zero tax)Upto 5Lacupto 7.27 Lac
192APremature PF withdrawal*Rs. 50,00010%10%
193– TDS on interest on securities***Rs. 10,00010%10%
194Payment of dividendRs. 5,00010%10%
194AInterest from Bank, post office’s FDRs. 40,00010%10%
Rs. 50,000 (For senior citizens)
194AInterest by others apart from on securitiesRs. 5,00010%10%
194BAmounts you won through lotteries or gamesAggregate of Rs. 10,000**30%30%
194BBAmounts you won from horse racesRs. 10,00030%30%
194DAMaturity of Life Insurance PolicyRs. 1,00,0005%5%
194EEPayment of an amount standing to the credit of an individual under National Savings SchemeRs. 250010%10%
194ICPayment that are made under Joint Development Agreement (JDA) to Individual/HUFNo Limit10%10%
194JAmounts paid as royalty for sale/distribution/exhibition of cinematographic filmsRs. 30,0002%2%
194KPayment of income for units of a mutual fund, for example- dividendsRs. 5,00010%10%
194LAPayment made for compensation for acquiring certain immovable propertyRs. 2,50,00010%10%
194LBPayment of interest on infrastructure  bonds to Non-Resident IndiansNA5%5%
194Ncash withdrawal over 1 Cr, and ITR is filedRs. 1,00,00,0002%2%
194NCash withdrawal 20 Lakh & 1 Cr  and ITR not filedRs. 20 Lac to 1 Cr5%5%
194OAmount paid for the sale of products/services by e-commerce service providers via their digital platformRs. 5,00,0001%1%
194STDS on the payment of any crypto or other virtual assetNA1%1%
206AATDS for non-availability of PANNAAt a rate higher of20%
 
1. Specified rate as per the act
2. 20%
3. Rate in force
206ABTDS on non-filers of Income tax returnNARate higher of: 
  
1. 5% 
2. Twice the mentioned rate in provision 
3. Rate in force 
TDS Chart

why using the right TDS rate matters

TDS Compliance: The government relies on TDS as a way to collect taxes at the source of income. Using the correct rate ensures you meet your tax obligations and avoid the hassle of dealing with notices or penalties from the Income Tax department

Accuracy in Tax Payment: Applying the appropriate TDS rate helps you deduct the right amount of tax from your payments, like salaries, rent, or professional fees. This ensures you pay the correct amount of tax to the government and reduces any potential tax liability at the end of the year.

Benefits for Businesses: Businesses that deduct and deposit TDS accurately can claim tax credits on their tax returns. This can lead to tax savings and improved cash flow.

Using the correct TDS Rate

So, how do you ensure you're using the correct TDS rate?
  1. Refer to the TDS Chart: The Finance Act publishes a TDS chart outlining the applicable rates for various types of transactions. You can find this chart above or consult a tax professional.
  2. Identify the Transaction Type: The TDS rate depends on the nature of your payment. For example, the TDS rate for rent payments differs from the rate for salary payments.
  3. Consider Taxpayer Details: Some rates may vary depending on the recipient’s tax status (individual, company, etc.).
  4. Stay Updated: TDS rates are subject to change in subsequent Finance Acts. Make sure you consult the latest chart for the applicable financial year.

Tds Compliance and Legal Obligations

  • Deducting TDS at the correct rates is a legal obligation imposed by the Income Tax Department.
  • Timely TDS Remittance: The TDS deducted needs to be deposited with the government by the prescribed due date. Generally, the due date falls on the 7th of the month following the month of deduction, except for the last quarter of the financial year.
  • Quarterly TDS Return Filing: Businesses are required to file quarterly TDS returns with the Income Tax department. These returns summarize the TDS deducted and deposited during the quarter.
  • Non-compliance can lead to penalties, fines, and legal proceedings, impacting the financial health and reputation of businesses and individuals.

Accurate Tax Deductions

  • Using the correct TDS rates ensures accurate deduction of taxes at the source, aligning with the provisions of the Income Tax Act, 1961.
  • It prevents under or over-deduction of taxes, avoiding discrepancies in tax payments and subsequent adjustments.

Financial Impact of Wrong TDS Rates

  • Incorrect TDS rates can result in underpayment or overpayment of taxes, affecting cash flow and financial planning.
  • Underpayment may lead to interest charges and penalties, while overpayment could result in unnecessary financial strain until refunds are processed.

Importance of TDS Rate Guidance

  • Seek guidance from tax experts to determine the appropriate TDS rates applicable to specific transactions.
  • Consultation with legal and tax advisors can help navigate complex tax regulations and ensure compliance with the latest provisions.

Utilizing of Tds Resources

  • Leverage online resources, such as TDS rate charts provided by government authorities or reputable financial platforms, to verify applicable rates.
  • Stay updated with changes in TDS rates through official notifications and circulars issued by the Income Tax Department.

Maintaining TDS Documentation

  • Maintain comprehensive records of TDS deductions, including transaction details, TDS certificates, and supporting documents.
  • Proper documentation facilitates smooth audits and inquiries by tax authorities, demonstrating diligent compliance with TDS regulations.
  • Adhering to the correct TDS rates is paramount for fulfilling tax obligations and maintaining financial integrity.

For assistance in navigating TDS regulations and ensuring compliance with tax obligations, Team IN Filings. offers expert TDS advisory services tailored to your needs.

TeamIndia.co.in

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