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TDS Rate Chart for FY 2022-23(AY 2023- 24): A Comprehensive Guide

Updated: Nov 30, 2023

TDS, an acronym for Tax Deducted at Source, entails the collection of income tax from diverse income sources like salary, rent, asset sales, dividends, and other forms. This procedure mandates the payer to withhold the applicable tax amount from the income being credited or paid to the recipient, subsequently remitting it to the government on the payee's behalf.

At the heart of simplifying the overall tax collection process, in the preview of the implementation of this system, tax obligations get effectively fulfilled at the source.

Unfolding corresponding updates from the budget 2023:

  1. Section 194BA - Embracing the digital era, the budget introduces the inclusion of TDS on income derived from online gaming. This step aims to ensure fair taxation practices in this rapidly growing industry.

  2. Section 196A - Recognizing the global nature of investments, starting April 1st, 2023, non-residents earning income from mutual funds in India are granted a valuable opportunity. They can now provide a Tax Residency Certificate, unlocking the potential to avail themselves of TDS rates specified in tax treaties. This provision offers them flexibility and aligns with international tax principles.

  3. Section 192A - Addressing the concerns of employees without a PAN card, a positive change has been implemented. The TDS rate on PF withdrawal has been reduced to 20%, replacing the previous maximum marginal rate. This revision ensures that employees without PAN are not unduly burdened while accessing their hard-earned savings.

  4. Section 193 - An adjustment in tax regulations has been made concerning interest earned from listed debentures. To promote consistency and effective tax administration, the exemption from TDS on such interest has been removed. Henceforth, the tax must be deducted on interest from these specified securities, ensuring a level playing field.

  5. Section 194N - Recognizing the evolving financial landscape, the budget brings forth an increase in the TDS threshold for cash withdrawals by cooperative societies. Starting April 1st, 2023, cooperative societies will be subject to TDS if the cash withdrawal amount surpasses Rs 3 crores. This amendment, up from the previous limit of Rs 1 crore, aims to enhance transparency and compliance in large-scale cash transactions.

Comprehending the TDS Rate Chart for FY 2022-23

Category 1:

Salary and Provident Fund

Section 192:
  • Nature of Payment: Salary

  • Taxable income liable to tax serves as the benchmark for applicability

  • TDS Rate: Determined based on the normal slab rate or the new tax regime slab rate chosen by the employee

Section 192A:
  • Nature of Payment: Payment of the accumulated balance of provident fund subject to taxation for the employee

  • Minimum threshold: ₹50,000

  • TDS Rate: 10%

Category 2:

Interest and Dividends

Section 193:
  • Nature of Payment: Interest on securities

  • Minimum limit: ₹2,500

  • TDS Rate: 10%

Section 194:
  • Nature of Payment: Dividend

  • Minimum limit: ₹5,000

  • TDS Rate: 10%

Section 194A:
  • Nature of Payment: Interest earned from bank deposits, post office deposits, and banking cooperative society deposits (excluding interest on securities)

a) Senior citizens:
  • Minimum limit: ₹50,000

  • TDS Rate: 10%

b) Others:
  • Minimum limit: ₹10,000

  • TDS Rate: 30%

Section 194BB:
  • Nature of Payment: Winnings from horse races

  • Minimum limit: ₹10,000

  • TDS Rate: 30%

Category 3:

Contractor Payments, Commissions, and Rent

Section 194C:
  • Nature of Payment: Payment made to contractors or sub-contractors

  • a) HUF/Individuals:

  • Minimum limit: Single transaction: ₹30,000 and aggregate of transactions: ₹1,00,000

  • TDS Rate: 1%

  • b) Others:

    • Minimum limit: Single transaction: ₹30,000 and aggregate of transactions: ₹1,00,000

    • TDS Rate: 2%

Section 194D:
  • Nature of Payment: Insurance commission

a) Individuals:
  • Minimum limit: ₹15,000

  • TDS Rate: 5%

b) Companies:
  • Minimum limit: ₹15,000

  • TDS Rate: 10%

Section 194DA:
  • Nature of Payment: Payment concerning life insurance policies (tax deducted on the income component)

  • Minimum limit: ₹1,00,000

  • TDS Rate: 5%

Section 194E:
  • Nature of Payment: Payment made to non-resident sportsmen/sports associations

  • TDS Rate: 20%

  • Note: The TDS rate may be subject to surcharge and health and education cess.

Section 194EE: