Finance Minister Nirmala Sitharaman presented the Union Budget on Saturday (1 February). During this time he announced a change in many rules, including rules related to TDS and TCS. For those investing in the stock market and mutual funds, the Finance Minister today announced relief in the budget regarding TDS.
Sitharaman said in a budget speech on Saturday that after changes in TDS rules, the number of such transactions will be reduced, which will benefit small taxpayers receiving small payments.If a person has an income, then if the person is given the remaining amount by deducting tax from that income, then the amount deducted as tax is called TDS.
Share and mutual fund investors relief in TDS
Section 194 : TDS limit has been changed on the dividend received by individual share holder. According to the budget provision, now TDS will be imposed on a dividend of more than 10 thousand rupees instead of 5 thousand rupees annually.
Section 194k: TDS limit has been increased from 5 thousand to 10 thousand on the dividend found on the mutual fund scheme. Meaning if you get more than Rs 10,000 dividend annually on investing in a mutual fund scheme, then the asset management company will deduct 10 % TDS from your dividend.
Section 193: If you get more than 10 thousand rupees annually on securities, then 10 percent TDS has been proposed on it. Earlier this limit was 5 thousand rupees.
Senior citizens will no longer have to pay TDS on interest of up to 1 lakh
194A: According to the budget provisions, senior citizens will no longer have to pay any TDS on the interest of up to Rs 1 lakh per annum. While the limit of 40 thousand rupees has been increased to 50 thousand for ordinary citizens.
TDS will have to be given less on sending money abroad
Sub-section (1g) of Section 206C: On spending or investing abroad, the government collects tax collection (TCS) at the source. The Finance Minister today proposed an increase in the Limit of TCS deduction under RBI’s Liberalized Remittance Scheme (LRS) in the budget. According to the budget proposal, the limit of deduction under LRS has been increased from Rs 7 lakh to Rs 10 lakh. TCS has also been exempted from sending funds for education with certain conditions. From October 1, 2023, TCS was used to send more than Rs 7 lakhs annually abroad. TCS Remedies means – Advance Tax on sending money abroad. This tax is deducted by a bank or remittance service before sending money abroad.
6 lakh rupees limit on rental income
194-I Under this section, the limit of TDS deduction on payment in the form of rent has been increased from 2 lakh 40 thousand to 6 lakhs annually. After the new limit, now the landlord will have to pay TDS on rental income of more than Rs 6 lakh.
Other changes regarding TDS are also proposed in the budget:
Section: 194g – Commission on the sale of lottery tickets, etc.… But the TDS limit has been increased from 15 thousand to 20 thousand.
Section 194LBC: TCS has been reduced from the current 20-25 per cent to 10 per cent on the investment made in the Securization Trust.