TDS Rates – A Comparative Analysis of Existing vs. Proposed Changes

  • Blog|Budget|Income Tax|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 24 July, 2024

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TDS Rates

Tax Deducted at Source (TDS) Rates refer to the specific percentages at which tax is deducted from various types of payments at the source of income. These rates are set by the government and vary depending on the nature of the payment and the status of the recipient (like individual, company, etc.). Common payments subject to TDS include salaries, interest payments, dividends, professional fees, and rent.

The table below shows the proposed changes to Tax Deducted at Source (TDS) rates by the Finance (No. 2) Bill 2024 compared to the existing rates.

Section Nature of Income Payer Payee TDS Rates
Existing Proposed
(a) (b) (c) (d) (e) (f)
194DA Payment in respect of Life Insurance Policy Every Payer Resident Person 5% 2%
194F Repurchase of Units by Mutual Fund or UTI Every Payer Any Individual or HUF 20% Omitted
194G Commission and other payments on sale of lottery tickets Every Payer Any person (resident or non-resident) engaged in business of stocking, distributing, purchasing or selling of lottery tickets 5% 2%
194H Commission and Brokerage Any person (Refer note 3) Resident Person 5% 2%
194-IB Payment of Rent by Certain Individuals or HUF Any Individual or HUF (not covered under Section 194-I) Resident Person 5% 2%
194M Payment to contractor, commission agent, broker or professional by certain Individuals or HUF Individual or HUF not liable for deduction under section 194C, 194H and 194J Resident person 5% 2%
194-O Payment by e-commerce operator to e-commerce participant E-commerce operator Resident e-commerce participant 1% 0.1%
194T Payment in the nature of salary, remuneration, commission, bonus or interest to partners of the firm Any Person Resident Person –          10%
195 Long-term Capital Gains exceeding Rs. 1.25 lakh from transfer of listed equity shares, units of equity oriented mutual fund or business trust as referred to in Section 112A Any Person Non-resident person or foreign company 10% 12.5%
195

 

 Long-term capital gain from transfer of unlisted shares or shares of a closely held company Any Person Non-resident person or foreign company 10% 12.5%
195

 

 Long-term Capital Gains from transfer of specified assets by a non-resident Indian Any Person Non-resident Indian 10% 12.5%
195

 

 Long-term Capital Gains from transfer of any other capital asset Any Person Non-resident person or foreign company 20% 12.5%
195

 

 Short-term Capital Gains from transfer of listed equity shares, units of equity oriented mutual fund or business trust on which Securities Transaction Tax (STT) is paid Any Person Non-resident person or foreign company 15% 20%

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