Important: Updated Tds Rates In Effect From October 1

By Author: TaxHelpdesk
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The financial landscape is witnessing a shift with the onset of October 1, 2024, as new Tax Deducted at Source (TDS) rates come into effect following the Union Budget 2024. These changes aim to streamline tax procedures and optimize financial transactions. Let’s delve into the key modifications that you need to be aware of:

New TDS Rate Adjustments:

TDS on Life Insurance Payments (Section 194DA): The TDS rate on life insurance policy payments has decreased from 5% to 2%, offering relief to policyholders.
Commission on Lottery Ticket Sales (Section 194G): The TDS rate on commissions from the sale of lottery tickets has been reduced to 2%, down from the previous 5%.
Commission/Brokerage TDS (Section 194H): The TDS rate on commission or brokerage has been lowered to 2% from the earlier 5%, effective October 1, 2024.
TDS on Rent Payments by Individuals or HUFs (Section 194-IB): Individuals or Hindu Undivided Families (HUFs) making rent payments will now face a 2% TDS rate, down from the previous 5%.
Certain Payments by Individuals or HUF (Section 194M): There will be a 2% TDS on specific payments ...
... made by individuals or HUFs, a reduction from the earlier 5% rate.
E-commerce Operators’ Payments (Section 194-O): E-commerce operators’ payments to participants will now attract a TDS rate of 0.1%, reduced from 1%.
Mutual Funds Repurchase (Section 194F): Noteworthy among the changes is the exclusion of TDS on mutual funds or Unit Trust of India repurchases under Section 194F effective October 1, 2024.

Additional Adjustments from October 1, 2024:

In addition to the TDS rate alterations, other changes include:

TDS on Floating Rate Bonds: A 10% TDS on central and state government bonds, including floating rate bonds, will apply, subject to revenue exceeding Rs 10,000 annually.
Share Buybacks: Share buybacks will now incur shareholder-level taxes, akin to dividends, potentially increasing the tax burden for investors.
Securities Transaction Tax (STT): Increased STT rates on Futures & Options (F&O) to 0.02% and 0.1%, respectively, along with additional levies on share buybacks.
For further details or assistance regarding these changes, feel free to reach out to “TaxHelpdesk” if you require our services or have any queries.

Stay informed and compliant with the latest tax regulations to navigate the financial realm effectively.