Finance Act, 2024 has made various changes under the Income tax act especially in TDS provision which shall be applicable from 01.10.2024. First let’s talk about the changes in TDS rates under various provisions of the Act:
| Section | Old TDS rate | New TDS rate (effective from 01.10.2024) |
| 194DA – Payment in respect of life insurance policy | 5% | 2% |
| 194G – Commission, etc., on sale of lottery tickets | 5% | 2% |
| 194H – Commission or brokerage | 5% | 2% |
| 194-IB – Payment of rent by certain individuals or Hindu undivided family | 5% | 2% |
| 194M – Payment of certain sums by certain individuals or Hindu undivided family | 5% | 2% |
| 194-O – Payment of certain sums by e-commerce operator to e-commerce participant | 1% | 0.1% |
The above TDS rates shall be applicable for transaction on which TDS is to be deducted after 01.10.2024.
Section 194 i.e. TDS on dividend shall not include TDS on buyback which shall be deemed dividend under section 2(22)(f) of the Income tax act.
Section 194C, amendment in what will not be considered as ‘work’ to be covered under section 194C is as under:
“but does not include—
(A) manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from a person, other than such customer or associate of such customer; or
(B) any sum referred to in sub-section (1) of section 194J.”
Section 194-IA, clarification has been issued wherein it has been mentioned that while considering consideration of property total consideration of all purchaser shall be considered to consider the limit of Rs.50lakh.
“Provided that where there is more than one transferor or transferee in respect of any immovable property, then the consideration shall be the aggregate of the amounts paid or payable by all the transferees to the transferor or all the transferors for transfer of such immovable property.”
Guidance on above article on Income Tax by:
Naman Maloo (C.A., B.Com)
He is currently working as Partner – Direct Tax with a renowned firm in Jaipur having experience in dealing Assessments before Income Tax authority, Tax Audit, International Taxation, Tax planning for NRI, Business planning and consultation.
E-mail: naman.maloo@jainshrimal.in | LinkedIn: Naman Maloo
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