TDS rates reduced in Budget 2024: New tax deducted at source applicable on rent payments, insurance, purchase of MF units, sale of property

On July 23, 2024, Finance Minister Nirmala Sitharaman presented the highly anticipated Budget 2024. One of the key highlights of the budget was the proposed changes to various tax-related policies, including revisions to the Tax Deducted at Source (TDS) rates.

Here is a look at the important TDS rate changes and their effective dates.

Section 194D - Payment of insurance commission (in case of person other than company) is proposed to reduce from 5% to 2%. This will be effective from March 1, 2025.


Budget 2024 reduces TDS on life insurance policy payout from 5% to 2%, Now get a higher payout on these case

Section 194DA - Payment in respect of life insurance policy is proposed to reduce from 5% to 2%. This will be effective from October 1, 2024.

New tax slab rates, capital gains taxation, standard deduction NPS: Effective dates of all Budget 2024 income tax changes



Section 194G – Commission etc on sale of lottery tickets is proposed to reduce from 5% to 2%. This will be effective from October 1, 2024.

Budget 2024 proposed 10% TDS on government bonds: You can still pay lower or zero TDS with this certificate.

Section 194-IB - Payment of rent by certain individuals or HUF is proposed to reduce from 5% to 2%. This will be effective from October 1, 2024.

Section 194M - Payment of certain sums by certain individuals or Hindu undivided family is proposed to reduce from 5% to 2%. This will be effective from October 1, 2024.

Budget 2024: Rate of TDS on house rent payment of more than Rs 50,000 per month cut to 2% from 5%

Section 194-O - Payment of certain sums by e-commerce operator to e-commerce participant is proposed to reduce from 1% to 0.1%. This will be effective from October 1, 2024.

Section 194F relating to payments on account of repurchase of units by Mutual Fund or Unit Trust of India is proposed to be omitted. This will be effective from October 1, 2024.

These TDS have been raised
Section 195: These changes have been proposed under this section

• After transferring listed equity shares, equity-oriented mutual fund units, or business trusts, the tax deducted at source (TDS) on long-term capital gains exceeding Rs. 1.25 lakh has been raised from 10% to 12.5%.
• The transfer of unlisted shares or shares of a closely held corporation carries a long-term capital gains tax (TDS), which is now 12.5% instead of 10%.
• The non-resident Indian's long-term capital gains tax (TDS) on the transfer of certain assets has been raised from 10% to 12.5%.

TDS on sale of immovable property
Section 194-IA: This provision stipulates that payments for the sale of immovable property exceeding Rs 50 lakh must include a 1% TDS. In transactions involving many buyers or sellers, the new budget makes it clear that this rule applies collectively. The amendments will take effect from the 1st day of October, 2024.

Tax Deduction at source on Floating Rate Savings
It is proposed that on interest surpassing ten thousand rupees on Floating Rate Savings (Taxable) Bonds (FRSB) 2020 or any other security of the Central or State Government that has been notified, TDS will be applicable.

The amendments will take effect from October 1, 2024.