Budget 2024-25: Know the Revised TDS Rates under Income Tax Act [Read Bill]

Finance Minister Nirmala Sitharaman unveiled her seventh consecutive Budget on July 23, marking a milestone that surpasses former Prime Minister Morarji Desai's record. This Budget, the first since the BJP-led NDA government's re-election in June, outlines fiscal plans for 2024-25.

The Finance (No. 2) Bill 2024 has introduced several changes to the Tax Deducted at Source ( TDS ) rates, aiming to simplify and reduce the tax burden in various sectors.

Below are the key amendments compared to the existing rates:

Section 194DA: For payments related to Life Insurance Policy, the TDS rate has been reduced from 5% to 2%, applicable to every payer and resident person.

Section 194F: The TDS on the repurchase of units by Mutual Funds or UTI has been omitted, down from the previous rate of 20%.

Section 194G: The TDS rate on commissions and other payments from the sale of lottery tickets has been reduced from 5% to 2%, applicable to any person involved in the business of stocking, distributing, purchasing, or selling lottery tickets.

Section 194H: The TDS on commissions and brokerage has been reduced from 5% to 2%, applicable to any person and resident person.

Section 194-IB: The TDS rate on rent payments by certain individuals or HUFs has been decreased from 5% to 2%.

Section 194M: The TDS for payments to contractors, commission agents, brokers, or professionals by certain individuals or HUFs has been reduced from 5% to 2%.

Section 194-O: The TDS rate on payments by e-commerce operators to e-commerce participants has been reduced from 1% to 0.1%.

Section 194T: A new TDS rate of 10% has been introduced for payments in the nature of salary, remuneration, commission, bonus, or interest to partners of the firm, exceeding Rs. 20000 in a financial year.

Section 195: Several changes have been proposed under this section:

  - The TDS on long-term capital gains exceeding Rs. 1.25 lakh from the transfer of listed equity shares, units of equity-oriented mutual funds, or business trusts has been increased from 10% to 12.5%.

  - The TDS on long-term capital gains from the transfer of unlisted shares or shares of a closely held company has been increased from 10% to 12.5%.

  - The TDS on long-term capital gains from the transfer of specified assets by a non-resident Indian has been increased from 10% to 12.5%.

  - The TDS on long-term capital gains from the transfer of any other capital asset has been increased from 20% to 12.5%.

  - The TDS on short-term capital gains from the transfer of listed equity shares, units of equity-oriented mutual funds, or business trusts on which Securities Transaction Tax ( STT ) is paid has been increased from 15% to 20%.

These proposed changes are intended to streamline the tax deduction process and reduce the overall tax burden on various types of income, benefiting both individuals and businesses.

To Read the full text of the Order CLICK HERE

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