TDS Amendments Chart for FY 2024-25
| Section | Transaction Type | Old TDS Rate | New TDS Rate | Threshold/Condition | Effective Date | Key Changes |
|---|---|---|---|---|---|---|
| 194D | Insurance Commission | 5% | 2% | TDS applies on commission paid by the insurer to non-corporate agents. | April 1, 2025 | TDS rate reduced from 5% to 2% on insurance commission. |
| 194DA | Life Insurance Payouts (Taxable) | 5% | 2% | TDS on taxable portion of life insurance policy payouts. | October 1, 2024 | TDS rate reduced from 5% to 2% on taxable life insurance payouts. |
| 194F | Mutual Fund Redemption | 20% | Removed | Applies to redemption of units of mutual funds or UTI. | October 1, 2024 | TDS provision removed on mutual fund redemptions. |
| 194G | Commission on Lottery Tickets | 5% | 2% | TDS on commission paid to lottery agents or distributors. | October 1, 2024 | TDS rate reduced from 5% to 2% on lottery ticket sales commission. |
| 194IB | Rent Paid by Individuals/HUFs | 5% | 2% | TDS on rent payments exceeding ₹50,000 per month made by individuals or HUFs. | October 1, 2024 | TDS rate reduced from 5% to 2% for individuals/HUFs paying rent exceeding ₹50,000 per month. |
| 194O | E-commerce Transactions | 1% | 0.1% | TDS on payments made by e-commerce operators to sellers for goods/services sold online. | October 1, 2024 | TDS rate reduced from 1% to 0.1% for e-commerce transactions. |
| 194IA | Purchase of Property | 1% | 1% | TDS on the purchase of immovable property exceeding ₹50 lakhs. | Continuous | No change in the rate. |
| 194LB | Income from Investment in Securitization | 10% | 10% | Applies to income earned from securitization transactions by individuals or entities. | Continuous | No change in the rate. |
| 194LBA | Income from Investment in REITs and InvITs | 10% | 10% | TDS on income paid by REITs and InvITs, including interest or dividend paid on units of these trusts. | Continuous | No change in the rate. |
Key Insights on Significant Changes
Reduction in TDS Rates:
- TDS on insurance commissions has been reduced to 2% from 5%, leading to a significant tax relief for non-corporate insurance agents.
- TDS on life insurance payouts has similarly been reduced to 2% from 5%, easing the burden on policyholders receiving payouts.
- Lottery commission also sees a reduction, with the TDS rate decreasing to 2% from 5%, which will benefit lottery agents and distributors.
Removal of TDS on Mutual Fund Redemption:
- TDS on mutual fund redemptions (Section 194F) has been completely removed. Previously, 20% TDS was applied, now the redemption process is free of such deductions.
E-commerce Transactions:
- The TDS rate on payments to e-commerce operators for transactions with sellers has been reduced to 0.1%, making it more favorable for online businesses and reducing the compliance burden.
Rent Payments by Individuals/HUFs:
- TDS on rent paid by individuals and HUFs has been reduced to 2% from 5%. This amendment is a significant change for businesses making rental payments, as well as individuals managing their rental expenses.
