New TDS rules from April 1, 2023

Union Budget 2023 proposed several changes in Tax Deducted at Source (TDS) rules that will come into effect from the new financial year starting April 1, 2023. In its “Highlights of Finance Bill, 2023”, the Income Tax Department recently shared the list of such TDS rules that were proposed to change in Budget 2023.

1. TDS on winning from online gaming has been proposed without any threshold benefit. The tax will be deducted either upon withdrawal or at the end of the financial year.

2. The exemption from TDS available on interest payments on listed debenture has been proposed to be removed.

3. If the recipient of EPF withdrawal does not provide his PAN, then TDS on the withdrawal will be 20%, instead of the maximum marginal rate.

4. Sections 206AB and 206CCA have been amended to exclude certain persons from the scope who are not required to file a return of income and are notified by the government.

5. For certain income paid to non-residents or foreign companies, TDS will be deducted at a rate of 20% or the rate specified in a tax treaty, whichever is lower. This relief will be available if the payee provides a tax residency certificate.

6. Section 155 has been amended to solve a TDS mismatch problem. “When a taxpayer reports income using the accrual method, it may be taxed before the TDS is deducted. It causes a TDS mismatch and prevents the taxpayer from claiming TDS credit. The amendment in section 155 allows taxpayers to apply to the assessing Officer within two years of the financial year in which the tax was withheld,” the Income Tax Department says.

“The Assessing Officer will then amend the assessment to allow the taxpayer to claim TDS credit. Section 244A is also amended to provide that the interest on refund arising out of the above rectification shall be for the period from the date of the application to the date on which the refund is granted,” it adds.

3 thoughts on “New TDS rules from April 1, 2023”

  1. In every budget some new rules are introduced by Union Government. But the individuals are being harrassed in getting refund from the IT department for which a simple solution is not yet implemented, and it takes months together for getting the refund. I am one of such individuals when postal authorities deducted TDS on my SCSS account during FY 2021-22 due to not furnishing 15H form in advance though my total income is not in the vicinity of paying any tax. In this case I sent a number of e-mails, but to my regret the exact reason for withholding the refund amount is not yet known to me. After retirement my main income is from the source of interest other than the paltry EPF pension of ₹2000/- and I continue to suffer for want of the withheld refund amount of ₹5320/- right from 27th July, 2022. It is therefore requested that a simple solution to this refund issue should be introduced thereby even the persons who are not well versed with the computer can approach the IT department to get verified the matter and get get their refund credited to their account.

  2. Arabindachowdhury to earn whatever way they can to meet the wasted money for wrong and whimsical policy,measures.

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