TDS and TCS amendments and Rates for Fin Year 2023-24

 

Amendments to TDS and TCS in the 2023 Budget

In the 2023 budget, the Finance Minister announced several key proposed amendments related to Tax Deducted at Source (TDS) and Tax Collected at Source (TCS). These amendments aim to maintain continuity, simplify taxation, and reduce the burden of compliance for taxpayers. This article presents a summary of the proposed amendments in a tabular format for easy reference.

I. TDS Amendments:

Section	Amendment Details
194BA	Tax provisions for income derived from online gaming
	- TDS to be deducted at 30% of net winnings at the end of the financial year or at the time of withdrawal
	- TDS applicable on every rupee earned after deduction of entry fees
	- Threshold of INR 10,000 not applicable for TDS on online gaming income
196A	Benefit related to tax treaty rate for non-residents earning income from mutual funds
	- Non-residents can avail lower tax rate available in tax treaty by providing tax residency certificate
192A	Relaxation for employees without PAN in provident fund withdrawals
	- Employees without PAN to receive accumulated balance after 20% tax deduction
193	Deduction of tax on interest on specified securities
	- Tax to be deducted from interest on listed securities in dematerialized form
194N	Increased threshold for TDS on cash withdrawals by cooperative societies
	- Threshold increased to Rs. 3.00 Crore from Rs. 1.00 Crore
194R	Clarification on deductibility of TDS on benefits or perquisites
	- TDS to be deducted on benefits or perquisites, whether in cash or kind
155(20)	Credit of TDS in the year when income is offered to tax
	- Assessee can claim credit in the financial year in which income is offered to tax
	- Application for credit must be raised within two years of the financial year

II. TCS Amendments:

Section	Amendment Details
206C(1G)	Increased TCS rate on remittances abroad
	- TCS rate increased to 20% from 5% for remittances under Liberalized Remittance Scheme and Tour Packages
	- TCS on remittances for medical and education above Rs. 7.00 lakh to continue at 5%
	- TCS on educational remittances from loans obtained from financial institutions remains at 0.5%
194I	TDS on rent payments
	- Threshold for TDS on rental payments exceeding Rs. 2,40,000 in a financial year

TDS Rate Chart for FY 2023-24 (AY 2024-25): A table displaying the TDS rates for various sections is provided for reference.

Conclusion: The proposed amendments to TDS and TCS in the 2023 budget aim to simplify taxation, reduce compliance burden, and ensure accurate disclosures. These amendments address various aspects such as online gaming income, tax treaty rates, PAN requirements, interest on securities, cash withdrawals, and more. It is essential for taxpayers to familiarize themselves with these amendments to ensure compliance with the revised TDS and TCS provisions.