Union Budget 2024-25 (Full) + FINANCE (No.2) Bill, 2024
There are various provisions of Tax Deduction at Source (TDS) with different thresholds and multiple rates between 0.1%, 1%, 2%, 5%, 10%, 20%, 30% and above. To improve ease of doing business and better compliance by taxpayers, the TDS rates are proposed to be reduced. However, no change would occur with respect to sections such as TDS on salary, TDS on virtual digital assets, TDS on winnings from lottery etc/ race horses, payment on transfer of immovable property and payments to non-residents, TDS rates for TDS on contracts etc.
2. Rationalisation of TDS rates is proposed as below.
Section | Present TDS Rate | Proposed TDS Rate | With effect from |
Section 194D - Payment of insurance commission (in case of person other than company) | 5% | 2% | 1.4.2025 |
Section 194DA - Payment in respect of life insurance policy | 5% | 2% | 1.10.2024 |
Section 194G – Commission etc on sale of lottery tickets | 5% | 2% | 1.10.2024 |
Section 194H - Payment of commission or brokerage | 5% | 2% | 1.10.2024 |
Section 194-IB - Payment of rent by certain individuals or HUF | 5% | 2% | 1.10.2024 |
Section 194M - Payment of certain sums by certain individuals or Hindu undivided family | 5% | 2% | 1.10.2024 |
Section 194-O - Payment of certain sums by e-commerce operator to e-commerce participant | 1% | 0.1% | 1.10.2024 |
Section 194F relating to payments on account of repurchase of units by Mutual Fund or Unit Trust of India | Proposed to be omitted | 1.10.2024 |
Full Text:
Union Budget 2024-25 (Full) + FINANCE (No.2) Bill, 2024
TDS rate rationalisation reduces multiple withholding rates to simplified lower bands, retaining specific exceptions for certain payments. Rationalisation of
TDS rates streamlines withholding provisions by lowering multiple prior rates for specified non-salary payments, proposing omission of the provision on mutual fund unit repurchases, and preserving existing withholding regimes for salaries, virtual digital assets, lotteries, immovable property transfers, non-resident payments and contractor payments; implementation is phased on different effective dates to promote administrative simplification and improved taxpayer compliance without changing substantive chargeability.
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