Union Budget 2023-24 + FINANCE Bill, 2023

The rates for deduction of income-tax at source during the FY 2023-24 under the provisions of sections 193, 194A, 194B, 194BB, 194D, 194LBA, 194LBB, 194LBC and 195 have been specified in Part II of the First Schedule to the Bill. The rates will remain the same as those specified in Part II of the First Schedule to the Finance Act, 2022, for the purposes of deduction of income-tax at source during the FY 2022-23. Further, Part II shall now also apply to the proposed section 194BA for deduction of income-tax at source on income by way of winnings from online games at the rate of 30 % being the rate in force.

2. For sections specifying the rate of deduction of tax at source, the tax shall continue to be deducted as per the provisions of these sections.

3. Surcharge-

3.1 The amount of tax so deducted shall be increased by a surcharge,-

(a) in the case of every individual or HUF or association of persons, except in case of an association of persons consisting of only companies as its members, or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Act, being a non-resident, calculated,-

(i) at the rate of 10% of such tax, where the income or aggregate of income (including the income by way of dividend or income under the provisions of sections 111A, 112 and 112A of the Act) paid or likely to be paid and subject to the deduction exceeds fifty lakh rupees but does not exceed one crore rupees;

(ii) at the rate of 15% of such tax, where the income or aggregate of income (including the income by way of dividend or income under the provisions of sections 111A 112and 112A of the Act) paid or likely to be paid and subject to the deduction exceeds one crore rupees but does not exceed two crore rupees;

(iii) at the rate of 25% of such tax, where the income or aggregate of income (excluding the income by way of dividend or income under the provisions of sections 111A, 112 and 112A of the Act) paid or likely to be paid and subject to the deduction exceeds two crore rupees but does not exceed five crore rupees;

(iv) at the rate of 37% per cent. of such tax, where the income or aggregate of income (excluding the income by way of dividend or income under the provisions of sections 111A, 112 and 112A of the Act) paid or likely to be paid and subject to the deduction exceeds five crore rupees;

(v) at the rate of 15% of such tax, where the income or aggregate of income (including the income by way of dividend or income under the provisions of section 111A,112 and 112A of the Act) paid or likely to be paid and subject to the deduction exceeds two crore rupees, but is not covered under (iii) and (iv) above

(II) It may be noted that in case where the total income of the individual or HUF or association of persons [except in case of an association of persons consisting of only companies as its members], or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Act includes any income by way of dividend or income chargeable under section 111A, 112 and section 112A of the Act, the rate of surcharge on the amount of income-tax deducted in respect of that part of income shall not exceed fifteen per cent.

(III) Further, in case where the income of the individual or HUF or association of persons [except in case of an association of persons consisting of only companies as its members], or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Act, is chargeable to tax under sub-section (1A) of section 115BAC of the Act, the surcharge at the rate of 37% on the income or aggregate of income of such person (excluding the income by way of dividend or income under the provisions of sections 111A, 112 and 112A of the Act) exceeding five crore rupees shall not be applicable. In such cases the surcharge shall be restricted to 25%.

(b) in the case of an association of persons, being a non-resident, and consisting of only companies as it members,-

(i) at the rate of 10% of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds fifty lakh rupees but does not exceed one crore rupees;

(ii) at the rate of 15% of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds one crore rupees;

(c) in the case of every co-operative society, being a non-resident, calculated ,-

(i) at the rate of 7% of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds one crore rupees but does not exceed ten crore rupees;

(ii) at the rate of 12% of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds ten crore rupees.

(d) in the case of every firm, being a non-resident at the rate of 12% of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds one crore rupees;

(e) in the case of every company, other than a domestic company, calculated,-

(i) at the rate of 2% of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds one crore rupees but does not exceed ten crore rupees;

(ii) at the rate of 5% of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds ten crore rupees.

3.2 No surcharge will be levied on deductions in other cases.

(2) Health and Education Cess-

“Health and Education Cess” shall continue to be levied at the rate of four per cent. of income tax including surcharge wherever applicable, in the cases of persons not resident in India including company other than a domestic company.

 

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Full Text:

Union Budget 2023-24 + FINANCE Bill, 2023

TDS rates and surcharge framework for the fiscal year set; winnings from online games are subject to withholding at a specified rate. TDS rates for non-salary incomes for FY 2023-24 remain as in the prior schedule and apply under the specified withholding provisions; the schedule now also covers withholding on online gaming winnings at the rate set in the Bill. Prescribed section rates govern deduction. A multi-tier surcharge regime increases deducted tax by differing rates across taxpayer categories and income bands, with caps limiting surcharge on dividend and specified capital-gains income and an alternative-regime surcharge restriction. Health and Education Cess of four percent applies on tax including surcharge where applicable.