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Union Budget 2024: Finance Minister Nirmala Sitharaman has decided to change the TDS provision by reducing the TDS rate from 5 percent to two percent and in some cases from one percent to 0.1 percent. Under the old system, there was no provision to deduct any tax-TDS on remuneration, interest, commission paid to partners by a partnership firm. Chartered Accountant (CA) Jatin C. Jatin Shah says that as a result of the amendments suggested in TDS by the Finance Minister, the amount to be paid to partners will be Rs. If it is more than 20000, then TDS will be taken at the rate of 10%.
The amount of TCS spent by a salaried employee on the money sent to his son who went abroad for studies as well as the amount of TCS spent on the purchase of a motor car will be taken into account while calculating TDS from the salary amount. With this system, the taxpayer will get more salary than before. So he will have more cash in hand. Earlier, TCS deducted was not taken into account in the TDS calculation for salaried taxpayers. Now TCS deduction will be taken into account.
1. TDS on insurance commission under section 194D, which was earlier 5%, has now been reduced to 2%. The new rates will be applicable from April 1, 2025.
2. TDS on payment of life insurance policy under section 194 DA has been reduced from 5 per cent to 2 per cent from October 1, 2024.
3. Under section 194G, TDS of 5% on the amount of commission received on sale of lottery tickets has been reduced to 2% from October 1, 2024.
4. Under section 194H, 5% TDS on commission and brokerage has been reduced to 2% from October 1, 2024.
5. Under section 194IB, the provision of 5% TDS on rent paid by a certain individual or Hindu Undivided Family has been reduced to 2% from October 1, 2024.
6. Payment made by an individual or Hindu Undivided Family under section 194M for brokerage, professional services or contracts and the amount exceeds Rs. 50 lakh, the TDS leviable on it has been reduced to 2 per cent from October 1, 2024.
7. Under 194O, the provision of one percent TDS on the amount paid by an e-commerce operator to any other person engaged in e-commerce has been reduced to 0.1 percent (10 paise). This provision will come into effect from October 1, 2024.
