- Reduction of TDS Rates applicable under Sec 192A in case of non-availability of PAN
- Presently, section 192A provides that TDS should be deducted at the rate of 10% of the taxable component on the payment of the accumulated balance due to the employees under the Employees Provident Fund Act
- However, employees who could not furnish their PAN and are entitled to receive such payment were subject to higher tax deductions at marginal rates
- It has been proposed to reduce the tax deduction rates at 20% as in other non-PAN cases
Applicable from 1st April, 2023
- Removal of the exemption from TDS on payment of interest on listed debentures to a resident under Section 193
- Presently, Section 193 provides exemption in TDS with respect to the payment of interest on any listed securities issued by the company held in dematerialized form
- It is proposed to withdraw the exemption in the aforesaid tax deduction to avoid misreporting of interest incomes
Applicable from 1st April, 2023
- Amendment to expand the tax deductions under section 194B and 194BB
- The proposed Finance Bill, 2023, has widened the ambit of section 194B (winnings from lottery or crossword puzzles) to include gambling or betting in any other form or nature to be subject to tax deduction
- It is noticed that many taxpayers escaped the tax deduction liability under section 194B and 194BB (winnings from horse race) by applying the threshold of Rs 10,000 per transaction and splitting their winnings to multiple transactions each below Rs 10,000
- A new provision for aggregating the amounts exceeding Rs. 10,000 during the financial year has been introduced under Section 194B and 194BB
Applicable from 1st April, 2023
- Insertion of section 194BA- TDS on online games
- It is proposed that TDS will be deducted on the winnings from online games at the rate of 30% without any threshold
- In case of withdrawals, the tax shall be deducted at the time of withdrawal on such net winnings in the user account at the end of the year
- The tax shall also be deducted on the remaining balance in the user account at the end of the financial year
- In case where the net earnings are wholly in kind or partly in cash and partly in kind and is insufficient to meet the liability of tax deduction, the person responsible for paying shall before releasing the winnings, ensure that tax has been paid with respect to such winnings
Applicable from 1st April, 2023
- Increasing the threshold limit for co-operatives to withdraw cash without TDS under section 194N
- Section 194N has been amended to increase the threshold limit for deduction of tax on cash withdrawals from 1 crore to 3 crores for co-operatives at the rate of 2%
Applicable from 1st April, 2023
- Explanation on deduction of tax under section 194R in case of cash or kind perquisites
- Section 194R states that any person providing benefit to a resident in course of business or profession, shall deduct tax at the rate of 10% on such value or aggregate of the value of such perquisites.
It has been clarified by the proposed Finance Bill, 2023 that such tax shall be deducted irrespective of whether the benefit or perquisite is received in cash or in kind, or partly in cash and partly in kind.
Applicable from 1st April, 2023
- Relief from deduction or collection of tax at higher rates for non- filers of return under section 206AB and 206CCA
It is proposed to exclude non–residents who do not have a permanent establishment in India and non-return filers from higher rates of tax collection or deduction under sections 206AB and 206CCA who are not required to file the return as their income has not extended the threshold limits and is notified by the Central government in this behalf
Applicable from 1st April, 2023
- Increasing the TCS rate for certain foreign remittances under section 206C (IG)
It is proposed to amend Section 206 (IG) to increase the TCS rate from 5% to 20% in case of overseas tour packages and other remittances through LRS excluding remittances for education and medical treatment.
Applicable from 1st April, 2023