The Union Budget 2 of 2024 introduced several amendments to the Tax Deducted at Source (TDS) provisions, aimed at simplifying tax compliance and reducing the burden on taxpayers. These changes, applicable for the Financial Year 2024-25 (Assessment Year 2025-26), include revised TDS rates, the introduction of new sections, and updates to existing thresholds. Additionally, the budget also focuses on the penal provisions associated with delays and defaults in TDS compliance.
Below is a comprehensive TDS Rate Chart that details the current and proposed TDS rates, effective dates, threshold limits, penalties, and due dates for the upcoming financial year.
TDS Rate Chart for FY 2024-25 (AY 2025-26)
| Section | Nature of Payment | Current TDS Rate | Proposed TDS Rate | Effective Date | Threshold Limit (Rs) | Penalties and Interest for Delay | Due Dates |
|---|---|---|---|---|---|---|---|
| 194D | Insurance Commission (Other than Company) | 5% | 2% | 1st April 2025 | 15,000 | Interest @ 1.5% per month or part thereof for delayed deposit. Penalty: Equal to the TDS not deducted or paid under Section 271C. | 7th of the next month |
| 194DA | Life Insurance Policy Payments | 5% | 2% | 1st Oct 2024 | 1,00,000 | Interest @ 1.5% per month or part thereof for delayed deposit. Penalty: Equal to the TDS not deducted or paid under Section 271C. | 7th of the next month |
| 194G | Commission on Sale of Lottery Tickets | 5% | 2% | 1st Oct 2024 | 15,000 | Interest @ 1.5% per month or part thereof for delayed deposit. Penalty: Equal to the TDS not deducted or paid under Section 271C. | 7th of the next month |
| 194H | Commission or Brokerage | 5% | 2% | 1st Oct 2024 | 15,000 | Interest @ 1.5% per month or part thereof for delayed deposit. Penalty: Equal to the TDS not deducted or paid under Section 271C. | 7th of the next month |
| 194-IB | Rent Payment by Individuals/HUF (Not covered u/s 194-I) | 5% | 2% | 1st Oct 2024 | 50,000 per month | Interest @ 1.5% per month or part thereof for delayed deposit. Penalty: Equal to the TDS not deducted or paid under Section 271C. | 7th of the next month |
| 194M | Certain Payments by Individuals/HUF | 5% | 2% | 1st Oct 2024 | 50,00,000 | Interest @ 1.5% per month or part thereof for delayed deposit. Penalty: Equal to the TDS not deducted or paid under Section 271C. | 7th of the next month |
| 194-O | Payment by E-Commerce Operator to Participants | 1% | 0.1% | 1st Oct 2024 | 5,00,000 | Interest @ 1.5% per month or part thereof for delayed deposit. Penalty: Equal to the TDS not deducted or paid under Section 271C. | 7th of the next month |
| 194F | Repurchase of Units by Mutual Funds or UTI | 20% | Proposed to be Omitted | 1st Oct 2024 | No limit | N/A | N/A |
| 194T | Payment of remuneration, interest, or any other amount payable to partners | New Section | 10% | 1st April 2024 | 20,000 | Interest: 1.5% per month for late payment. Penalty: Under Section 271C. | 7th of the next month |
Important Notes:
- Interest on Delayed TDS Payment: Deductors are liable to pay interest at 1.5% per month or part of a month for delays in depositing TDS to the government.
- Late Filing Fees: Under Section 234E, a late fee of Rs. 200 per day is levied for delays in filing the TDS return.
- Penalties for Non-Deduction: Under Section 271C, a penalty equal to the amount of TDS not deducted or paid may be levied.
- Due Dates for TDS Payment: TDS must be deposited by the 7th of the next month following the month in which the deduction is made.
Changes Incorporated as per Budget 2 of 2024:
The proposed TDS rates and effective dates are updated according to the amendments introduced in Budget 2 of 2024. The key amendments focus on reducing the TDS rates on specified payments to facilitate business and improve taxpayer compliance.
This table highlights all necessary information, making it easier to understand and apply the TDS provisions for FY 2024-25
