Today, i.e. from October 1, 2024, new rates of Tax Deducted at Source i.e. TDS have come into effect. In this, TDS on payments related to life insurance policy, commission on sale of lottery tickets etc. has been reduced.
New Delhi: After the formation of the government led by Prime Minister Narendra Modi for the third time at the Center, Finance Minister Nirmala Sitharaman presented the full Union Budget in the month of July. During this, she announced changes in many rules, including TDS rates, which are coming into effect from today i.e. 1 October 2024. Let us tell you that the full name of TDS is Tax Deducted at Source. To understand: If a person has any income, then after deducting tax from that income, if the remaining amount is given to the person, then the amount deducted as tax is called TDS.
Does TDS have to be paid on every income?
Actually, the government collects tax through TDS. Every tax is applicable on many types of income sources such as salary, interest or commission received on any investment, dividend and share buyback etc. However, this tax is not levied on every income. Different interest rates have been fixed on many different types of payments from the income tax.
New TDS rate
- Section 194-IB – TDS charge on payments by way of rent by certain individuals or HUFs is proposed to be reduced from 5% to 2%.
- Section 194M – Tax on payments of certain sums by certain individuals or Hindu Undivided Families has been reduced from 5% to 2%.
- Section 194-O – Tax on payments of certain sums by e-commerce operators to e-commerce participants has been reduced from 1% to 0.1%.
- Section 194F relating to payments on account of repurchase of units by a mutual fund or Unit Trust of India is proposed to be abolished.
- TDS rate for payments under sections 19DA, 194H, 194-IB and 194M has been reduced from 5% to 2%.
- TDS rate for e-commerce operators has been reduced from 1% to 0.1%.
- Section 194DA – TDS on payments in respect of life insurance policies has been reduced from 5% to 2%.
- Section 194G – TDS on commission on sale of lottery tickets etc. has been reduced from 5% to 2%.
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