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Writer's pictureCA Umang Jain

Impact of Budget 2024 on TDS

Updated: Aug 26

The budget have made good number of changes in the TDS regulations, lets read more to check what's new and what's amended.



TDS Change in Budget 2024

Sec 192 TDS on Salary

TDS & TCS Adjustment is Allowed while computing TDS us 192

01-10-2024

Sec 194C TDS on Contract

Any Service on which TDS is to be deducted us 194J shall not be cover in 194C

01-10-2024

194DA Payment of LIC

NEW Rate -2%         Old Rate -5%

01-10-2024

194F Payment on account of repurchase of units by MF & UTI

To be deleted

01-10-2024

194G Commission or Lottery

NEW Rate -2%         Old Rate -5%

01-10-2024

194H Payment of Commission or Brokerage

NEW Rate -2%         Old Rate -5%

01-10-2024

194IA Payment for immovable property

Clarification added that consideration means total consideration in case of multiple buyer or seller

01-10-2024

194IB Payment of Rent by Individual

NEW Rate -2%         Old Rate -5%

01-10-2024

194M Certain sums by certain individuals

NEW Rate -2%         Old Rate -5%

01-10-2024

194O Payment by ECO to Online Seller

NEW Rate -0.1%         Old Rate -1%

01-10-2024

194D Insurance Commission 

NEW Rate -2%         Old Rate -5%

01-04-2025

194T TDS on payment to partner

10% TDS for any payment to partner exceeding 20,000

01-04-2025

Summarizing the Key things to look out for:

1

The government of India plans to merge the two current tax exemption regimes into one regime.

2

The 5 per cent TDS payment rate will be merged with the 2 per cent TDS rate. The government has proposed to bring down the TDS rates from 5 per cent to 2 per cent in certain sections as mentioned above.

3

The 20 per cent TDS rate on repurchasing units through mutual funds or Unit Trust of India (UTI) is now being withdrawn.

4

The TDS rate on e-commerce operators is reduced by 90 basis points to 0.1 per cent from 1 per cent.

5

The credit given on tax collected at source (TCS) proposed to be given in the TDS, will now be deducted on salary.

6

The Finance Minister proposed to decriminalize the delays for payment of TDS up to the due date of statement filling.

7

The government also plans to issue a standard operating procedure (SOP) for the TDS defaults and take steps to simplify and rationalise the compounding guidelines, in case of such a default.

8

The government is in the process of rolling out an amendment to Section 39, which mandates the return filing by TDS deductors every quarter.

9

This mandate to file TDS returns will be compulsory even if no deduction is made during the quarter.

10

This move will provide an enabling clause for prescribing the time limit for filing such returns.


The withdrawal of the 20% TDS rate on mutual fund unit repurchase marks a step towards easing the tax burden for investors.


This aligns with the overall budget's focus on inclusive growth, employment generation, and infrastructure development, aimed at creating ample opportunities and fostering a resilient economy.


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Regards

CA Umang Jain

Harish Chotia

+ 91 96323-32850

 

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