Call TDS Rates issued for FY 2024-25
Deduction of taxes at source is an important source of revenue for government to have their working capital needs in place. TDS means tax deducted at source, at the time of making payments as mentioned in the provisions of Income Tax Act, 1961. TDS is deducted by the payer at the time of making payment to the payee. Provisions of TDS are applicable on various payments like salary, rent, sale of any particular assets, payments of interests or dividends, payments related to businesses or professional fees etc.
We will discuss certain important TDS rates which are commonly used in businesses or financial transactions:
| Section | Deductee | Nature of Transaction | Threshold limit | Rate of TDS(%) |
| 192 | R(resident),NR(Non-resident) | Salary payment | Basic exemption limit of employee | Slab rate |
| 194 | R | Dividend payment | 5000 | 10 |
| 194A | R | Interest other than interest from securities (i.e. from deposits with post/banks etc.) | Senior Citizen-5000 Others-40000 | 10 |
| 194B | R,NR,FC(Foreign Company) | Income from lottery winnings, card games, crossword puzzles etc. | Aggregate income from such activities-10000 | 30 |
| 194BA | R,NR,FC | Income from online gaming | No threshold limit | 30 |
| 194BB | R,NR,FC | Winnings from horse races | 10000 aggregate winning during one FY | 30% |
| 194C | R | Payment to contractor or sub contractor | Note 1 | Note 1 |
| 194D | R | Insurance Commission to a) domestic company b) other than companies | 15000 | a)10 b)5 |
| 194DA | R | Income from the insurance pay-out, while payment of any sum in respect of a life insurance policy | 1,00,000 | 5 |
| 194E | NR,FC | Payment to NR Sportsman or sport association | No threshold limit | 20+surcharge applicable+ 4%scess |
| 194H | R | Commssion or brokerage payment | 15000 | 5 |
| 194I | R | Rent payment | Note 2 | Note 2 |
| 194IA | R | Payment in consideration of transfer of certain immovable property other than agricultural land | 50,00,000 | 1 |
| 194J | R | Fees for professional services | 30,000 | 10 |
| 206AB | R | Payment to non-filers, i.e. those who have not filed their income tax return in the last year Budget 2023: Non-filers do not include: – People who are not required to file their ITRs – NRs who do not have a Permanent Establishment in India | No threshold limit | – 2 times the rate given in the Income Tax Act or Finance Act or – 5%, whichever is higher |
Notes:
- Payment to contractors or sub contractors:
This is applicable if in a single transaction the payment exceeds Rs.30,000 or if in aggregate transaction the payment exceeds Rs.1,00,000.
- In case the deductees is Individual or HUF – 1% TDS
- In case of other deductees – 2% TDS
- Rent Payments:
194-I(a) Rent on plant and machinery – Threshold Limit Rs. 2,40,000 – 2%TDS
194-I(b) Rent on land/building/furniture/fitting – Threshold Limit Rs. 2,40,000 – 10%TDS
Conclusion:
TDS rates depends on the type of deductees or nature of the payment made. Failure to deduct TDS attract penal provisions under income tax, therefore the compliance for deduction of taxes is very crucial.
P.S.:TDS rate chart issued by CBDT is attached herewith.
About Author:
CA Chinmay Shirish Agate
Chinmay Agate is a Practicing Chartered Accountant having 4+ years of experience and expertise in the field of Direct Taxation and Auditing compliances. In the past, he worked in various CA firms and comes with wide industry experience from services, retail to manufacturing to trading where he has handled various complex assignments. He has keen interest in Forex and Derivative knowledge as well as fundamental analysis.