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Rate of TDS (Tax Deducted at Source)

DEDUCTION OF TAX AT SOURCE (TDS)

LIABILITY FOR TDS

Any person responsible for making payment of certain category of incomes is liable to deduct tax at source at an appropriate occasion.

The law prescribes time when the TDS is to be made, rate at which it should be made, when TDS should be paid to the Government and associated administrative responsibilities of payer (tax deductor) and payee (tax deductee) have been prescribed.

A. TDS Rate Chart for A.Y. 2016-17 on Payments other than Salary and Wages


Section   No. Nature of Payment Threshold
Total Payment
During the Year
Payment to
Individual
or HUF
Others
1. In the case of a person other than a company
1.1 where the person is resident in India-
192 Payment of salary - 10% 10%
192A Payment of accumulated balance of provident fund which is taxable in the hands of an employee (with effect from 01.06.2015). Rs. 30000/- 10% 10%
193 Interest on Debentures Rs. 5000/- 10% 10%
194 Deemed Dividend - 10% 10%
194 A Interest by banks (Other than interest on securities) Rs. 10000/- 10% 10%
194 A Interest by Others (Other than interest on securities) Rs. 5000/- 10% 10%
194 B Winnings from Lotteries / Puzzle / Game Rs. 10000/- 30% 30%
194 BB Winnings from Horse Race Rs. 5000/- 30% 30%
194 C (1) Payment to Contractors Rs. 30000/- 1% 2%
194 C (2) Payment to Sub-Contractors / for Advertisements Rs. 30000/- 1% 2%
194 D Payment of Insurance Commission Rs. 20000/- 10% 10%
194 EE Out of deposits under NSS Rs. 2500/- 20% NA
194 G Commission on Sale of Lottery tickets Rs. 1000/- 10% 10%
194 H Commission or Brokerage Rs. 5000/- 10% 10%
194 I Rent of Land, Building or Furniture Rs. 180000/- 10% 10%
194 I Rent of Plant & Machinery Rs. 180000/- 2% 2%
194 J Professional / technical services, royalty Rs. 30000/- 10% 10%
194 J
(1)
Remuneration / commission to director of the company - 10% 10%
194 J (ba) w.e.f. 01 .07.2012, Any remuneration / fees / commission to a director of a company, other than those on which tax is deductible under section 192. - 10% 10%
194 LA Compensation on acquisition of certain immovable property Rs. 2,00,000/- 10% 10%
194 IA Compensation on transfer of certain immovable property other than agricultural land (w.e.f. 01 .06.2013) Consideration is
Rs. 50 lakh or
more.
1% 1%
194LD Interest on certain bonds & Govt. securities (w.e.f. 01 .06.2013)   5% 5%

  1. Copies of Form Nos. 15G and 15H received by the payer have to be filed with the Chief Commissioner Commissioner within 7 days of the succeeding month.
  2. If the person responsible for deducting and paying tax fails to do so, he shall be considered as an assessee in default, liable to pay interest @ 12% p.a. on the amount of such tax from the date on which such tax was deductible to the date of actual payment, and penalty, not exceeding the amount of tax and rigorous imprisonment ranging from 3 months to 7 years and fine. The interest payment needs to be paid before filing of Quarterly Return.
  3. Sec. 199 – Credit for tax deducted :
    1. Credit will be given for the assessment year in which such income is assessble.
    2. Where such income is assessable in the hands of any other person, credit shall be given to such other person.
    3. When any security, property etc. is jointly owned by two or more persons not constituting partnership, credit for TDS on income there from shall be given to such persons in the proportion in which the income is distributed.
  4. A payee from whose income TDS is made must intimate his PAN to tax deductor. Tax deductor must to quote PAN of payees in TDS Certificate and TDS return [Sec. 139A].
  5. TAN/TDCAN to be quoted on all quarterly statements of TDS/ TCS section 203A(ba).
  6. A declaration for non-deduction of tax u/s. 197A can be furnished by the assessee only if his aggregate income is less than threshold limit. Senior Citizens can file declaration if tax on their estimated total income is likely to be NIL.
  7. Disallowance due to non-deduction: If tax deductible u/ss. 193, 194A, 194C, 194H, 194J and 195 is not deducted/paid before applicable due dates, the relevant expenditure otherwise allowable in computing Total Income of the payer would be liable for disallowance u/s 40(a)(i)/(ia). The deduction will be allowed in the year in which TDS is paid. For details see section 40(a).

TIME SCHEDULE

Sl. No. Section Of Act Nature of Payment in brief Cut Off Amount Rate %
HUF/IND Others
1 192 Salaries Average Rate
2 193 Interest on debentures 5000 10 10
3 194 Deemed dividend - 10 10
4 194A Interest other than Int on securities (by Bank) 10000 10 10
4A 194A Interest other than Int. on securities (By others) 5000 10 10
5 194B Lottery / Cross Word Puzzle 10000 30 30
6 194BB Winnings from Horse Race 5000 30 30
7 194C(1) Contracts * 30000 1 2
8 194C(2) Sub-contracts/ Advertisements * 30000 1 2
9 194D Insurance Commission 20000 10 10
10 194EE Paymentsout of deposits under NSS 2500 20 -
11 194F Repurchase of units by MF/UTI 1000 20 20
12 194G Commission on sale of lottery tickets 1000 10 10
13 194H Commission or Brokerage 5000 10 10
14 194I Rent (Land & building) 180000 10 10
Rent (P & M , Equipment, furniture & fittings) 180000 2 2
15 194J Professional/Technical charges/Royalty & Non-compete fees 30000 10 10
16 194J(1)(ba) Any remuneration or commission paid to director of the company(Effective from 1 July 2012) NIL 10 10
17 194LA Compensation on acquisition of immovable property 200000 10 10
18 194IA Payment on transfer of certain immovable property other than agricultural land(applicable only if amount exceeds : (a) Value exceeds INR 50) (Effective from 1 June 2013) 1 1
19 194LBA on income distributed by business trust to its holders ( Sec 194LBA – wef 1.6.15)     10 10