TDS on life insurance payouts reduced to two percent for taxable sums, changing the withholding rate for payers.

The amendment reduces the tax deduction at source rate on payments under life insurance policies from five percent to two percent for sums payable to residents that are includible in total income; the payor remains responsible for deducting tax on amounts including bonuses but excluding amounts not includible under the statutory non taxable insurance provision, with the reduced rate effective from 1 October 2024.

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