Tax Deducted at Source guide: Know TDS rates for various incomes in FY 2024-25 – checklist

Mar18,2024



TDS Rates for FY 2024-25: Tax Deducted at Source (TDS) is a mechanism by which the government collects taxes directly from the source of income. This applies to many types of income like salary, interest on bank deposits, commission, house rent and dividends etc. However, the TDS deduction rate varies depending on the specific rules.
For example, if a person pays house rent of Rs 50,000 or more, he has to deduct TDS at the rate of 5% before making the payment to the landlord.
It is important to follow the prescribed rules regarding TDS deduction and filing of TDS returns. An ET report said failure to comply could lead to fines and even possible imprisonment in severe cases.
“TDS rates vary depending on the nature and amount of income as well as the status of the recipient (whether they are resident, non-resident, etc.),” Tax2Win co-founder Abhishek Soni was quoted as saying. , In some serious cases, if determined under Section 276B of the Income Tax Act 1961, the deductor may face prosecution and imprisonment of up to seven years for willfully failing to deduct or deposit TDS. This legal action could have serious consequences and long-term implications for the deductor.”
Understanding How TDS Works and Knowing TDS Rates
While making a payment subject to TDS, the payer has to deduct a specified percentage of the amount paid. The recipient then receives a TDS certificate from the deductor, indicating the amount deducted.
For example, in cases where the monthly house rent exceeds Rs 50,000, the tenant must provide Form 16C (TDS Certificate) to the landlord within 15 days from the due date of filing the TDS return. On receiving the certificate, the deductor can claim the TDS amount as tax paid for the concerned financial year. TDS deposited is reflected in the deductor's Form 26AS and Annual Information Statement (AIS).

TDS rates for FY 2024-25

Below is a table showing the TDS rates applicable for salary, house rent, shares and other scheduled transactions in the financial year 2024-25:

section nature of transaction Limit Limit (Rs.) tds rate
192 Salary basic discount As per TDS rate calculated
192a Premature Withdrawal of Employees Provident Fund (EPF) 50,000 10% on providing PAN. 20% without PAN
193 interest on securities 5,000 10%
194 Dividend 5,000 10%
194a Interest on deposits in bank or post office Senior Citizens – 50,000 Others – 40,000 10% for both
194b Income from lottery winnings, puzzles, card games, etc. 10,000 30%
194ba Earning from online games no minimum limit 30%
194bb income from horse racing winnings 10,000 30%
194d Insurance commission to individuals/companies 15,000 Individuals: 5% Companies: 10%
194da Payment for life insurance policy 1,00,000 5%
194 AD National Savings Scheme Payment 2,500 10%
194f Payment for repurchase of units by mutual fund or UTI no specified limit 20%
194h commission/brokerage 15,000 5%
194-i Rent:
plant and machinery 2,40,000 2%
Land/Building/Furniture/Fittings 2,40,000 10%
194-Come Payment on transfer of immovable property other than agricultural land 50,00,000 1%
194-IB No need to undergo tax audit on rent paid by HUF/individual 50,000 per month 5%
194K Income from units payable to a resident no specified limit 10%
194LA Compensation for acquiring immovable property 2,50,000 10%
194n Cash withdrawal over specified amount Cooperative Society: 3 crores 2%
Others: 1 crore
Cash withdrawals from multiple bank accounts during the last year 1 crore 2%
Total cash withdrawal more than Rs 20 lakh 2 million 2%
Total cash withdrawal more than Rs 1 crore 1 crore 5%
194p TDS for senior citizens above 75 years of age basic exemption limit General Tax Slab Rates
194s Payment of Virtual Digital Assets Specified persons – 50,000 Others – 10,000 1%
195 Income on investments of NRI citizens no specified limit 20%
195 LTCG under section 115E in case of NRI citizen no specified limit 10%
195 LTCG under section 112(1)(c)(iii) no specified limit 10%
195 LTCG under section 112A no specified limit 10%
195 STCG under section 111A no specified limit 15%
195 LTCG other than LTCG mentioned under section 112A, 10(33), 10(36) no specified limit 20%
196b LTCG and other income from units of offshore funds no specified limit 10%
206ab Payment made to people who did not file ITR no specified limit 2 times the rate mentioned in the Income Tax Act or 5%, whichever is higher
206AA TDS rate if PAN is not available no specified limit Specified rates or 20%, whichever is higher

Source: Abhishek Soni, co-founder, Tax2Win (a tax filing assistance company) as quoted by ET



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