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Union Budget 2024-25 (Full) + FINANCE (No.2) Bill, 2024
As per provisions of section 194DA, any person responsible for paying to a resident any sum under a life insurance policy, including the sum allocated by way of bonus on such policy, other than the amount not includible in the total income under clause (10D) of section 10, shall, at the time of payment thereof, deduct income-tax thereon at the rate of 5% on the amount of income comprised therein.
2. It is proposed that TDS under section 194DA of the Act be reduced from 5% to 2%.
3. The amendment will take effect from 1st day of October 2024.
[Clause 54]
Full Text:
TDS on life insurance payouts reduced by amendment, lowering withholding obligation on qualifying policy payments for residents. Section 194DA requires persons paying sums under life insurance policies to deduct tax at source on the income component of such payments, excluding amounts exempt under clause (10D) of section 10. The Finance (No.2) Bill, 2024 proposes a reduction in the withholding rate under Section 194DA, with the amendment to take effect from the first day of October under Clause 54, thereby lowering the deductor's TDS obligation on qualifying life insurance payouts to residents. of Press 'Enter' after typing page number.
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