Revised TDS Rates - Jurishour No. 1 Latest News Tax

The Central Board of Direct Taxes (CBDT) has notified the revised TDS rates chart for AY 2025-26 effective from October 2024.

What is TDS?

The concept of Tax Deducted at Source (TDS) was introduced to facilitate tax collection at the point of income generation. Under this system, a person (the Deductor) who is responsible for making a payment of a specified nature to another person (the Deductee) is required to deduct tax at source and remit it to the Central Government. The Deductee, whose income has been subject to TDS, is entitled to claim credit for the deducted amount, based on Form 26AS or the TDS certificate issued by the Deductor.

Union Budget 2024 And TDS

The Union Budget 2024 introduced several important proposals, which were enacted through the Finance (No. 2) Act, 2024. Among these was the revision of TDS rates for the Assessment Year (AY) 2025-26, effective from October 1, 2024.

In light of this, the Central Board of Direct Taxes (CBDT) has published the revised TDS Rate Chart for AY 2025-26 on its website, applicable from October 1, 2024.

Revised TDS Rates On Accumulated Balance Of Provident Fund

Section 192A: 10% TDS shall be payable on Payment of accumulated balance of provident fund which is taxable in the hands of an employee.

Revised TDS Rates On Interest on securities

Section 193: 10% TDS shall be payable on interest on securities. Any debentures or securities for money issued by or on behalf of any local authority or a corporation established by a Central, State or Provincial Act. Any debentures issued by a company where such debentures are listed on a recognised stock exchange in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and any rules made thereunder;

The rate of 10% TDS shall be payable on any security of the Central or State Government; [i.e. 8% Savings (Taxable) Bonds, 2003 and 7.75% Saving (Taxable) Bonds, 2018, Floating Rate Savings Bonds, 2020 (Taxable) or any other notified security] and interest on any other security.

Revised TDS Rates Dividend Income

Section 194: 10% TDS shall be payable on Income by way of dividend and income by way of interest other than “Interest on securities”.

Revised TDS Rates Gaming

Section 194B: 30% TDS shall be payable on Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort, or from gambling or betting of any form or nature whatsoever.

Section 194BA: 30% TDS shall be payable on Income by way of winnings from any online game.

Section 194BB: 30% TDS shall be payable on Income by way of winnings from horse races.

Revised TDS Rates Payment to contractor/sub-contractor

Section 194C: In case of HUF/Individuals 1% TDS and 2% TDS in case of others shall be payable on Payment to contractor/sub-contractor.

TDS on Insurance

Section 194D: 5% TDS shall be payable on Insurance commission.

Section 194DA: 5% TDS shall be payable on payment in respect of life insurance policy w.e.f. 1/9/2019, the tax shall be deducted on the amount of income comprised in insurance pay-out till 30-09-2024.

However, 2% TDS shall be payable on payment in respect of life insurance policy w.e.f. 1/9/2019, the tax shall be deducted on the amount of income comprised in insurance pay-out w.e.f 01-10-2024.