Tax Deduction at source – TDS
Tax Deduction at source – TDS
Any person paying income to another person in the form of some specified transactions above the threshold limits specified in the Income Tax Act, is responsible to deduct tax at source and needs to deposit that TDS to the government within the time limit specified. And also required to file the quarterly return of TDS deducted and deposited on or before the dates specified by the Govt.
Relaxation in TDS rates due to Covid19 Pandemic:
To give some relaxation to the taxpayers from hardship of Covid19, the government has announced some relief in the TDS rates for the period starting from 14.05.2020 to 31.03.2021. These relaxations are only for Resident Indians, so these revised rates are not applicable on Non-residents.
In below tables detail of various TDS rates applicable to resident and non-resident Indians, as well as domestic and international companies in India, are given:
TDS Rate Chart for F.Y. 2020-21 (A.Y: 2021-22)
Salary Payment:
Section | Specified Transaction | Threshold Limit | TDS Rate Applicable from 01/04/2020 to 13/05/2020 | TDS Rate Applicable from 14/05/2020 to 31/03/2021 | ||
Resident | Non-resident * | Resident | Non-resident * | |||
Rs. | TDS Rate (%) | TDS Rate (%) | TDS Rate (%) | TDS Rate (%) | ||
192 | Salaries | – | As per applicable normal slab rate | As per applicable normal slab rate | As per applicable normal slab rate | As per applicable normal slab rate |
192A | Premature withdrawal from EPF | 50000 | 10 | 10 | 10 | 10 |
Interest Payment:
Section | Specified Transaction | Threshold Limit | TDS Rate Applicable from 01/04/2020 to 13/05/2020 | TDS Rate Applicable from 14/05/2020 to 31/03/2021 | |||
Resident | Non-resident * | Resident | Non-resident * | ||||
Rs. | TDS Rate (%) | TDS Rate (%) | TDS Rate (%) | TDS Rate (%) | |||
193 | Interest on securities – 8% Savings (Taxable) Bonds, 2003 or 7.75% Savings (Taxable) Bonds, 2018 during the financial year | 10000 | 10 | – | 7.5 | – | |
193 | Interest on securities – Interest on securities for money issued by or on behalf of any local authority/statutory corporation, listed debentures of a company(other than demat form), any other interest on securities | 5000 | 10 | – | 7.5 | – | |
94A | Interest (Banking co., co-operative society engaged in banking, post office) | 40000 | 10 | – | 7.5 | – | |
194A | Interest (Any other person) | 5000 | 10 | – | 7.5 | – | |
194LD | Interest on certain bonds from Govt. securities | – | – | 5 | – | 5 | |
195 | Interest income payable by Govt./Indian concern (other than section 194LB or 194LC) | – | – | 20 | – | 20 | |
Dividend Payment:
Section | Specified Transaction | Threshold Limit | TDS Rate Applicable from 01/04/2020 to 13/05/2020 | TDS Rate Applicable from 14/05/2020 to 31/03/2021 | ||
Resident | Non-resident * | Resident | Non-resident * | |||
Rs. | TDS Rate (%) | TDS Rate (%) | TDS Rate (%) | TDS Rate (%) | ||
194 | Dividends | 5000 | 10 | – | 7.5 | – |
Note: In Budget 2020, the Finance Minister abolished Dividend Distribution Tax (DDT) . As a result, the dividend received on equity shares and mutual funds is now taxable at the normal applicable slab rates, which were earlier exempt in the hands of recipient. So now the dividend received shall be taxable in the hands of the shareholder / unit holder. As the Dividend would be taxable in the hands of the shareholders now, provisions of TDS would be applicable. So, an amendment to the existing Section 194 has been made to add the provision to deduct TDS on Dividend from Equity Shares.
Winning from Lottery or Horse Race:
Section | Specified Transaction | Threshold Limit | TDS Rate Applicable from 01/04/2020 to 13/05/2020 | TDS Rate Applicable from 14/05/2020 to 31/03/2021 | ||
Resident | Non-resident * | Resident | Non-resident * | |||
Rs. | TDS Rate (%) | TDS Rate (%) | TDS Rate (%) | TDS Rate (%) | ||
194B | Winning from lotteries | 10000 | 30 | 30 | 30 | 30 |
194BB | Winning from Horse race | 10000 | 30 | 30 | 30 | 30 |
Payment to Contractor:
Section | Specified Transaction | Threshold Limit | TDS Rate Applicable from 01/04/2020 to 13/05/2020 | TDS Rate Applicable from 14/05/2020 to 31/03/2021 | ||
Resident | Non-resident * | Resident | Non-resident * | |||
Rs. | TDS Rate (%) | TDS Rate (%) | TDS Rate (%) | TDS Rate (%) | ||
194C | Contractor-Single
Transaction-Individual/HUF -Others |
30000 |
1 2 |
– – |
0.75 1.5 |
– – |
194C | Contractor – Consolidated Payment During the F.Y.
– Individual/HUF – Others |
100000 |
1 2 |
– – |
0.75 1.5 |
– – |
Insurance commission or Principal payment:
Section | Specified Transaction | Threshold Limit | TDS Rate Applicable from 01/04/2020 to 13/05/2020 | TDS Rate Applicable from 14/05/2020 to 31/03/2021 | ||
Resident | Non-resident * | Resident | Non-resident * | |||
Rs. | TDS Rate (%) | TDS Rate (%) | TDS Rate (%) | TDS Rate (%) | ||
194D | Insurance commission
– Other than Company – Company |
15000 |
5 10 |
– – |
3.75 10 |
– – |
194DA | Maturity of Life insurance policy | 100000 | 5 | – | 3.75 | – |
Commission payment:
Section | Specified Transaction | Threshold Limit | TDS Rate Applicable from 01/04/2020 to 13/05/2020 | TDS Rate Applicable from 14/05/2020 to 31/03/2021 | ||||||
Resident | Non-resident * | Resident | Non-resident * | |||||||
Rs. | TDS Rate (%) | TDS Rate (%) | TDS Rate (%) | TDS Rate (%) | ||||||
194G | Commission-Lottery | 15000 | 5 | 5 | 3.75 | 5 | ||||
194H | Commission/Brokerage | 15000 | 5 | – | 3.75 | – | ||||
Payment of Rent and other Real estate transactions:
Section | Specified Transaction | Threshold Limit | TDS Rate Applicable from 01/04/2020 to 13/05/2020 | TDS Rate Applicable from 14/05/2020 to 31/03/2021 | ||
Resident | Non-resident * | Resident | Non-resident * | |||
Rs. | TDS Rate (%) | TDS Rate (%) | TDS Rate (%) | TDS Rate (%) | ||
194I | Rent of – Plant/Machinery /Equipment
– Land and Building/Furniture & Fixture |
240000 | 2
10 |
–
– |
1.5
7.5 |
–
– |
194IA | Transfer of certain immovable property other than agriculture land | 50 lakh | 1 | – | 0.75 | – |
194IB | Rent by Individual/HUF | 50000 per month | 5 | – | 3.75 | – |
194IC | Payment under Joint Development Agreements to Individual/HUF | – | 10 | – | 7.5 | – |
Payment of professional and other fees:
Section | Specified Transaction | Threshold Limit | TDS Rate Applicable from 01/04/2020 to 13/05/2020 | TDS Rate Applicable from 14/05/2020 to 31/03/2021 | |||||
Resident | Non-resident * | Resident | Non-resident * | ||||||
Rs. | TDS Rate (%) | TDS Rate (%) | TDS Rate (%) | TDS Rate (%) | |||||
194J | Professional Fees | 30000 | 10 | – | 7.5 | – | |||
194J | Technical Fees (w.e.f. 01.04.2020) | 30000 | 2 | – | 1.5 | – | |||
194J | Payment to call centre operator (w.e.f. 01.06.2017) | 30000 | 2 | – | 1.5 | – | |||
194J | Director’s fees | – | 10 | – | 7.5 | – | |||
195 | Fees for technical services | – | – | 10 | – | 10 | |||
195 | Royalty | – | – | 10 | – | 10 | |||
195 | Fees for technical services | – | – | 10 | – | 10 | |||
Capital Gain transactions:
Section | Specified Transaction | Threshold Limit | TDS Rate Applicable from 01/04/2020 to 13/05/2020 | TDS Rate Applicable from 14/05/2020 to 31/03/2021 | ||
Resident | Non-resident * | Resident | Non-resident * | |||
Rs. | TDS Rate (%) | TDS Rate (%) | TDS Rate (%) | TDS Rate (%) | ||
195 | Long-term capital gain
– Under Section – 115E/ 112(1)(c)(iii)/112A – Any Other Gains |
– |
– – |
10 20 |
– – |
10 20 |
195 | Short-term capital gain – 111A | – | – | 15 | – | 15 |
Other Miscellaneous transactions:
Section | Specified Transaction | Threshold Limit | TDS Rate Applicable from 01/04/2020 to 13/05/2020 | TDS Rate Applicable from 14/05/2020 to 31/03/2021 | ||
Resident | Non-resident * | Resident | Non-resident * | |||
Rs. | TDS Rate (%) | TDS Rate (%) | TDS Rate (%) | TDS Rate (%) | ||
194K | Payment of any income in respect of
(a) units of a mutual fund as per section 10(23D); or (b) the units from the administrator; or (c) units from specified company (w.e.f. 01.04.2020) |
5000 | 10 | – | 7.5 | – |
194LA | Compensation on transfer of certain immovable property other than agriculture land
(TDS exempted if covered under RFCTLARR Act w.e.f. 01.04.2017) |
250000 | 10 | – | 7.5 | – |
194LB | Income by way of interest from infrastructure debt fund | – | – | 5 | – | 5 |
194LBA | Income from units of business trust
– interest received or receivable from a special purpose vehicle; or – dividend referred to in sub-section (7) of section 115-O |
– |
10
10 |
5
10 |
7.5
7.5 |
5
10 |
194LBA | Distribution of rental income to unit holders
– Other than Company – Company |
– |
10 10 |
30 40 |
7.5 7.5 |
30 40 |
194LBB | Income in respect of units of investment fund
– Other than Company – Company |
– |
10 10 |
30 40 |
7.5 7.5 |
30 40 |
194LBC | Income in respect of investment in securitization fund
– Individual/HUF – Company – Other Person |
– |
25 30 30 |
30 40 30 |
18.75 22.5 22.5 |
30 40 30 |
194LC | Income by way of interest by an Indian specified company to a non-resident/foreign company on foreign currency approved loan / long-term infrastructure bonds from outside India | – | – | 5 | – | 5 |
194LC | Income by way of interest by an Indian specified company on rupee denominated bond / any long-term bonds from outside India, which is listed only on a recognized stock exchange located in any International Financial Services Centre | – | – | 4 | – | 4 |
194M | Certain payments by Individual/HUF | 50 lakh | 5 | – | 3.75 | – |
194N | Payment of certain amount in cash | 1 Crore | 2 | 2 | 2 | 2 |
194N | Payment of certain amount in cash (first proviso of section 194N)if-
– Amount is more than Rs.20 lakh but up to Rs. 1 crore – Amount exceeds Rs. 1 crore (Applicable from 01.07.2020) |
N.A.
N.A. |
N.A.
N.A. |
2
5 |
2
5 |
|
194-O | Applicable for e-commerce operator for the sale of goods or provision of services facilitated by it through its digital or electronic facility or platform (Applicable from 01.10.2020) | – | N.A | – | 0.75 | – |
195 | Income of Investment made by an NRI | – | – | 20 | – | 20 |
195 | Any Other Income – Other than Company
– Company |
– | –
– |
30
40 |
–
– |
30
40 |
196A | Income in respect –
– of units of a Mutual Fund specified under clause (23D) of section 10; or – from the specified company referred to in the Explanation to clause (35) of section 10 |
– | – | 20 | – | 20 |
196B | Income from units to an offshore fund | – | – | 10 | – | 10 |
196C | Income from foreign currency bonds or GDR of an Indian company | – | – | 10 | – | 10 |
196D | Income of foreign Institutional Investors from securities (not being dividend or capital gain) | – | – | 20 | – | 20 |
194E | Non-resident sportsmen or sports association | – | – | 20 | – | 20 |
194EE | NSS | 2500 | 10 | 10 | 7.5 | 10 |
194F | Repurchase units by MFs | – | 20 | 20 | 15 | 20 |
*Applicable surcharge and Health & Education Cess shall be added to TDS rates mentioned above.
Note: In case of non-furnishing of PAN/Aadhaar by deductee, TDS will be charged at normal rate or 20% (5% in case of section 194-O), whichever is higher.
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