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What is the latest TDS Rates Chart for FY 2022-23 (AY 2023-24) applicable? Whether there are any changes in rates from the last Financial Year to the current Financial Year?
When we receive income through different ways like Salary, Dividend income from mutual funds or stocks, commission, rent, interest on Bank Fixed Deposits / Securities etc., the providers of this income like Bank or your employer deduct the tax before transferring you such income.
TDS or tax deducted at source is a process of collecting Income Tax at the source. It is a process of deducting the tax from the original source of income.
TDS is calculated and levied on the basis of a certain threshold limit, which is the maximum level of income after which TDS will be deducted from your future income/payments. It is deducted as per the Indian Income Tax Act, 1961.
As I told earlier, apart from salary income and Bank FD earning, there are many ways TDS is deducted like interest income from the post office, insurance commission, rent payment, early EPF withdrawals, the sale of immovable property, rent payments on property etc.,
Basics of TDS (Tax Deducted at Source)
The concept of TDS was introduced with an aim to collect tax from the very source of income. As per this concept, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government. The deductee from whose income tax has been deducted at source would be entitled to get a credit of the amount so deducted on the basis of Form 26AS or TDS certificate issued by the deductor.
Let us take an example that you deposited Rs.10,00,000 FD for a year at 8% interest. After a year, you earn an interest of Rs.80,000. Now the bank will deduct TDS on this Rs.80,000 interest at the rate of 10% and deposit the same with Income Tax Department and issue you the TDS certificate which reflects this transaction.
Suppose your income (along with this Bank FD interest of Rs.80,000) is below the basic exemption limit of Rs.2,50,000, then you can file income tax returns and claim the TDS of Rs.8,000 deducted by the Bank and you will get the refund of this.
However, assume that your tax slab is 30%, then you have to pay the remaining 20% tax (30%-10% TDS already deducted) on such interest income of Rs.80,000. Thus you have to pay the tax of Rs.16,000 (Rs.24,000 Total Tax-Rs.8,000 TDS).
Many people to avoid such procedural issues submit the Form 15G/H and think that they avoided the tax. By submitting Form 15G/H, one can avoid the TDS. But one can’t escape from the tax liability.
Latest TDS Rates Chart for FY 2022-23 (AY 2023-24)
In Budget 2022, major changes have been proposed namely related to TDS on payment for the transfer of a virtual digital asset, TDS on Sale of Immovable Property (Higher of Stamp Duty Valuation and Sales Consideration), Higher TDS Rates for Non-Filers of ITR (Reduced Period of 1 year) and TDS on benefit or perquisite of a business or profession.
Considering all these changes, let us now look into the applicable latest TDS Rates Chart for FY 2022-23 (AY 2023-24).
| Section | For Payment of | Threshold limit | TDS Rate % |
|---|---|---|---|
| 192 | Salary Income | Income Tax Slab | Slab rates (Based on old or new tax regimes) |
| 192 A | EPF – Premature withdrawal | Rs 50,000 | 10% If no Pan, TDS @ 30% |
| 193 | Interest on Securites | Rs. 10,000 | 10% |
| 193 | Interest on Debentures | Rs 5,000 | 10% |
| 194 | Dividend (Dividend other than listed companies) | Rs 5,000 | 10% (No TDS on Div Payouts by REITs / InvITs) |
| 194 A | Interest other than on securities by banks / post office | Rs. 40,000 (Rs 50,000 for Senior Citzens) | 10% |
| 194 A | Interest other than on securities by others | Rs. 5,000 | 10% |
| 194 B | Winnings from Lotteries / Puzzle / Game | Rs. 10,000 | 30% |
| 194 BB | Winnings from Horse Race | Rs. 10,000 | 30% |
| 194 D | Payment of Insurance Commission (Form 15G/H can be submitted) | Rs. 15,000 | 5% (Individuals) 10% (Companies) |
| 194DA | Payment in respect of Life Insurance Policy | Rs 1,00,000 | 5% |
| 194E | Payment to non-resident sportsmen/sports association | – | 20% |
| 194 EE | Payment of NSS Deposits | Rs 2,500 | 10% |
| 194 G | Commission on Sale of Lottery tickets | Rs 15,000 | 5% |
| 194 H | Commission or Brokerage | Rs 15,000 | 5% |
| 194 I | Rent of Land, Building or Furniture | Rs. 2,40,000 | 10% |
| 194I | Rent of Plant & Machinery | Rs. 2,40,000 | 2% |
| 194 IB | Rent (Tenant has to deduct TDS) (Individuals who are not liable to Tax Audit) | Rs 50,000 (per month) | 5% |
| 194 IA | Transfer of Immovable Property , other than Agricultural land | Rs. 50 lakh | 1% |
| 194IC | Payment of monetary consideration under Joint Development Agreements | – | 10% |
| 194J | Fees for professional or technical services | Rs 30,000 | 2% (or) 10% |
| 194LA | Payment of compensation on acquisition of certain immovable property | Rs 2,50,000 | 10% |
| 194 LB | Interest from Infrastructure Bond to NRI | NA | 5% |
| 194 LD | Interest on certain bonds and govt. Securities | NA | 5% |
| 194N | Cash withdrawal during the previous year from one or more account maintained by a person with a banking company, co-operative society engaged in business of banking or a post office: | > Rs 1cr | 2% |
| 194Q | Purchase of goods (applicable w.e.f 01.07.2021) | Rs 50 lakh | 0.10% |
| 206AB | TDS on non-filers of ITR at higher rates (applicable w.e.f 01.07.2021) | – | Higher of – 5% – Twice the rate in act – Twice the rate or rate in force |
| 194P | TDS on Senior Citizen above 75 Years (No ITR filing cases) | – | Slab Rates |
| 206AA | TDS rate in case of Non availability of PAN | – | Higher of – As per act Twice the rate or rate in force 20% |
| 194S | TDS on payment for Virtual Digital Assets | – | 1% |
Many of you may be aware that the new section 194S was introduced during Budget 2022. Let me share some inputs on this.
In order to widen the tax base from transactions so carried out in relation to the Virtual Digital Assets, it is proposed:-
to insert section 194S to the Act to provide for deduction of tax on payment for transfer of virtual digital asset to a resident at the rate of one per cent of such sum.
Payment in Kind/Exchange
In case the payment for such transfer is–
(i) wholly in kind or in exchange of another virtual digital asset where there is no part in cash; or
(ii) partly in cash and partly in kind but the part in cash is not sufficient to meet the liability of deduction of tax in respect of whole of such transfer, the person before making the payment shall ensure that the tax has been paid in respect of such consideration.
Threshold Limit 15/18
i) In case of specified persons, the provisions of section 203A and 206AB will not be applicable.
ii) Further, no tax is to be deducted in case the payer is the specified person and the value or the aggregate of such value of consideration to a resident is less than Rs. 50,000 during the financial year.
iii) In any other case, the said limit is proposed to be Rs. 10,000 during the financial year.
iv) It is also proposed to provide that if tax has been deducted under section 194S, then no tax is to be collected or deducted in respect of the said transaction under any other provision of Chapter XVII of the Act.
v) Furthermore, in any sum paid for transfer of virtual digital asset is credited to any account, whether called “Suspense Account” or by any other name, in the books of account of the person liable to pay such sum, such credit of the sum shall be deemed to be the credit of such sum to the account of the payee and the provisions of section 194S shall apply accordingly.
vi) It is proposed to empower the Board to issue guidelines, with the prior approval of the Central Government, to remove any difficulty arising in giving effect to the provisions of the said section and every such guideline issued by the Board shall be laid before each House of Parliament, and shall be binding on the income-tax authorities and on the person responsible for paying the consideration on transfer of such virtual digital assets.
vii) It is also proposed to provide that in case of a transaction where tax is deductible under section 194-O along with the proposed section 194S, then the tax shall be deducted under section 194S and not section 194-O.
Definition of Specified Person
For the purposes of the said section, it is proposed to provide that ‘specified person’ means a person:–
i) being an individual or Hindu undivided family whose total sales, gross receipts or turnover from the business carried on by him or profession exercised by him does not exceed one crore rupees in case of business or fifty lakh rupees in case of profession, during the financial year immediately preceding the financial year in which such virtual digital asset is transferred;
ii) being an individual or Hindu undivided family having income under any head other than the head ‘Profits and gains of business or profession’.
Definition of Virtual Digital Assets
To define the term “virtual digital asset”, a new clause (47A) is proposed to be inserted to section 2 of the Act. As per the proposed new clause, a virtual digital asset is proposed to mean any information or code or number or token (not being Indian currency or any foreign currency), generated through cryptographic means or otherwise, by whatever 16/18 name called, providing a digital representation of value which is exchanged with or without consideration, with the promise or representation of having inherent value, or
functions as a store of value or a unit of account and includes its use in any financial transaction or investment, but not limited to, investment schemes and can be transferred, stored or traded electronically. Non fungible token and; any other token of similar nature are included in the definition.
Applicability
This amendment will take effect from 1st of July, 2022
Latest TDS Rate Chart FY 2022-23 (AY 2023-24) for NRIs
When it comes to TDS, the rules changes to NRIs. Hence, let us discuss on this aspect separately.
# Interest earned on Non-Resident Ordinary Account (NRO) is taxable. TDS of 30% is applicable to it. But interest earned on Non-Resident External (NRE) accounts and Foreign Currency Non-Resident (FCNR) accounts is not taxed in India. Hence, there is no tax deducted at the source on NRE and FCNR interest income.
# NRI Investments in Shares / Mutual Funds attract TDS and below are the TDS rate applicable on MF redemptions by NRIs for FY 2022-23
| Type of Mutual Funds | STCG and TDS Rates | LTCG and TDS Rates |
| Equity Oriented Funds | 15% | 10% (Without indexation benefit over and above Rs.1 lakh gain) |
| Debt Mutual Funds | 30% (Assuming investor falling under 30% tax slab) | On listed – 20% with indexation On unlisted – 10% without indexation |
Misconceptions about TDS (Tax Deducted at Source)
# Avoiding TDS does not mean avoiding Tax. You just avoid the deduction of tax. However, you have to pay the tax as per the applicable rules and tax rate even if you avoided TDS. For example, in case of FDs, one can give Form 15G or Form 15H and avoid TDS. But it does not mean that such FD interest income is tax free. You have to pay the tax on such interest as per applicable tax rates.
Hence, never rush to submit Form15G/H or any method just to avoid TDs.
# If you paid the TDS, then your tax liability does not end there itself. You have to file IT return and if anything more than TDS is payable, then you have to pay it.
# All are not eligible to submit the Form 15G or Form 15H. Because only those individuals are eligible to submit the Form 15G or Form 15H whose total taxable income is NIL and also and the total of the aggregate of your income for which form 15 G can be submitted should not exceed the basic exemption limit. But sadly neither individual care about such rules nor the Banks who accept the forms.
Hope this much information is enough for you to understand the Latest TDS Rates Chart for FY 2022-23 (AY 2023-24).
What about Section 194R – TDs on perquisites?
Dear CA,
It is at 10%.
Dear Mr Basu
I am a senior citizen & went to Post office for opening new SCSS account.The Post Master told me that under new TDS rules, form 15H would not apply for SCSS & TDS will have to be paid although my interest will be lesser than 50,000 pa
Please advise
Dear Ajit,
Whether they deduct TDS or not, SCSS interest is taxable income. If your income is less than the basic exemption limit, then you can claim the refund. Hence, no need to worry.
Dear Sir,
U/S 194Q Regarding.
I have a doubt that on what amount tds @.1% has to be deducted.
During the F.Y.2021-22 I purchase goods worth Rs.4500000 & in the month of Apr-2022 purchases are to the tune of Rs.1000000 lac.
Kindly clarify whether exemption of Rs.5000000 has to be availed & tds to be deducted on Rs.500000 or tds has to be deducted on total Rs.5500000.
Dear Husain,
It is clearly mentioned in the Sec.194Q as “Such payment is to be done for the purchase of goods of the value/ aggregate of the value exceeding INR 50 Lakhs.”. Hence, the TDS to be deducted is only on Rs.5,00,000 but not on Rs.55,00,000.
Hello
I have been following your posts and has been benefited a lot. I have a doubt regard stipend of my sister who is a PG Medical student. She is getting stipend of Rs 55,000(approx) per month and now I’m not sure that whether she has to pay income tax on or not. Some are saying that stipend is exempted from income tax while some are saying that stipend are not exempted. Please clarify??
Dear Dhiraj,
There is a lot of confusion in this regard. However, I personally feel that better to consider as taxable income and file ITR.
TDS under section 194C is not included in the Chart.
From CA YOGESH BAGADIA
Dear Yogesh,
I have updated the TDS parts which are mostly relevant to Individuals.