The Income Tax Department announced TDS Rate 2024 or TDS Deduction Rate 2024 for the current financial year based on certain transactions such as salary, house rent, interest income, cash withdrawal, fixed deposits, and other sources. Section-wise, complete details are listed here.
Tax Deducted at Source (TDS) is a tax collection method in India wherein tax is deducted from the source of income at the time of payment. TDS is deducted on certain transactions such as salary, house rent, interest income, cash withdrawal, and fixed deposits. The TDS rates are different for each transaction and depend on the level of income, where it comes from, and whether the person earning the income is a resident or non-resident.
If income exceeds the prescribed limit on income such as salary, interest income on bank deposits, commission, house rent, or dividends, TDS will be cut on those transactions as per the rules. TDS returns should also be filed; otherwise, penalties and legal action may be possible.
For example, if a person pays Rs.50 thousand per month on top of the house rent, 5% TDS has to be paid before paying the rent to the house owner. The rules regarding TDS deduction have to be followed strictly. Also, the TDS certificate should be taken within the specified time.
TDS Rates 2024 by Transaction
The TDS rates for various transactions are mentioned below:
- According to Section 192, TDS is based on the basic salary, and a monthly salary exemption exists.
- According to Section 192A, an exemption of up to Rs.50,000/—is granted in case of premature withdrawal of the Employees’ Provident Fund. In case of subsequent withdrawal, 10% TDS should be paid to those who have given a PAN card and 20% TDS to those who have not given a PAN card.
- According to Section 193, interest on securities is exempted up to Rs.5000. If this limit is exceeded, 10% TDS will be charged.
- According to Section 194, dividend income is exempt up to Rs.5000. If this limit is exceeded, 10% TDS will apply.
- According to Section 194A, interest income on bank and post office deposits is exempt for senior citizens up to Rs.50,000/—. There is no TDS for general customers up to Rs.40 thousand. If the limit is exceeded, TDS will be cut at 10%.
- According to Section 194B, income from lottery, puzzles, and card games is exempt up to Rs.10 thousand. If the limit is exceeded, 30% TDS must be paid.
- According to Section 194BA, there are no exemptions if income is generated through online games. 30% TDS has to be paid.
- According to Section 194BB, if the income is derived from horse racing, there is an exemption of up to Rs.10,000. If the limit is exceeded, 30% TDS will be charged.
- According to Section 194D, there is an exemption of up to Rs.15,000/- if an insurance commission is received by individuals and companies. If the limit is exceeded, TDS will be charged at 5% for individuals and 10% for companies.
- According to Section 194DA, the premium of life insurance policies is exempted up to Rs.1 lakh. If it exceeds this, 5% TDS must be paid.
- According to Section 194EE, an exemption of up to Rs. 2,500/- is available if you invest in the National Savings Scheme. After that, 10% TDS should be paid.
- According to Section 194F, there is no exemption on the purchase of units of mutual funds, 20% TDS is charged.
- According to Section 194H, commission and brokerage up to Rs.15,000/—are exempt. 5% TDS will be charged on top of that.
- According to Section 194I, house rent, plant and machinery up to Rs.2,40,000/—are exempt, and then 2% TDS has to be paid. For the same land, building, and furniture, there is an exemption of Rs.2.40 lakh. After that, 10% TDS should be paid.
- According to Section 194IA, there is an exemption for immovable property transactions except for agricultural land up to Rs.50 lakhs. After that, 1% TDS should be paid.
- According to Section 194N, there is an exemption of up to Rs.3 crore for cooperative societies and Rs.1 crore for others when cash is drawn. On top of that, 2% TDS will be charged. If cash is withdrawn from various bank accounts, there is an exemption of up to Rs.1 crore. After that, 2% TDS will be taken. Up to Rs.20 lakh is exempted if withdrawal is made through apps. After that, 2% TDS should be paid. If the same exceeds Rs.1 crore, 5% TDS will be charged.
