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What is TDS?

Normally, a person is supposed to pay income tax, at the time of filing his income return for the year. However, the concept of Tax Deducted at Source or TDS, was introduced in India with an aim to deduct tax at the source by deducting it as and when it is originating and not at a later date. Thus, by introducing TDS, the government collected tax in advance so as to lessen the chances of tax evasion by the taxpayer.

TDS Rate Chart for FY 2021-22

Tax is deducted at the time of payment in many cases, some of which are:

1. Salary (Section 192)
2. Dividends (Section 194)
3. Winning from horse race (Section 194BB)
4. Winning from lottery of crosswords puzzle (Section 194B)
5. Bank interest (Section 194A)
6. Brokerage or commission (Section 194H)
7. Interest on securities (Section 193)
8. Payment of rent (Section 104I)
9. Payment in respect of life insurance policy to policy holder (Section 194DA)
10. Payment in respect of deposits under the National Saving Scheme (Section 194EE)
11. Payment of accumulated balance of employee's Provident Fund (Section 192A)
12. Payment on account of repurchases of units by Mutual Funds or Unit Trust of India (Section 194F)
13. Payment of compensation on compulsory acquisition of certain immovable property (Section 194LA)

Thus, at the time of these payments, tax is deducted before making the payment and the amount paid is net of tax. This tax is then deposited in the account of the Central Government by the deductor.

When should TDS be deducted and by whom?

Any person making payments specified in the Income Tax Act, is required to deduct tax at the time of making such payment. However, TDS shouldn't be deducted if the person making the payment is an individual or HUF, whose books aren't required to be audited.

Deductor: The company or person who makes the payment and deducts tax on the same is called a TDS deductor. The deductor is then supposed to deposit the tax collected with the government.

Deductee: The company or person who receives the payment, net of tax is called a deductee.

 

TDS Rate Chart for FY 2021-22:

The following rates are after considering cess @4% and shall be increased by applicable surcharge.

APPLICABLE TDS SECTION

TDS RATES (For AY 2022-23)

 

IN THE CASE OF A PERSON OTHER THAN A COMPANY

IN THE CASE OF A COMPANY

 

Where the person is a resident of India

Where the person is not a resident of India

Where the company is a domestic company

Where the company is not a domestic company

Section 192: Payment of Salary

Normal Slab Rate (or) New Tax Regime Slab Rate as opted by employee

Normal Slab Rate (or) New Tax Regime Slab Rate as opted by employee

NA

NA

Section 192A: Payment of accumulated balance of provident fund which is taxable in the hands of an employee Threshold Limit – Rs.50,000

10%

10.40%

NA

NA

Section 193: Interest on Securities

  1. any debentures or securities for money issued by or on behalf of any local authority or a corporation established by a Central, State or Provincial Act
  2. any debentures issued by a company where such debentures are listed on a recognised stock exchange
  3. any security of the government
  4. interest on any other security

Threshold Limit – Rs.2,500

10% 10% 10% 10%

NA

10% 10% 10% 10%

NA

Section 194: Dividend Threshold Limit – Rs. 5,000 TDS on dividend shall not apply to dividend income credited or paid to a business trust by a special purpose vehicle(SPV) or payment of dividend to any other person as may be notified. This means that no TDS needs to be deducted to AIF Category III also.

NA

NA

10%

NA

Section 194A: Interest Income on bank deposits, post office deposit, banking co-operative society deposit (other than "Interest on securities") Threshold Limit for Senior Citizens – Rs.50,000 Other than senior citizens – Rs.40,000 Interest other than “Interest on securities” (Other Than Bank Deposit/Post Office Deposit/Banking Co-Society Deposit) Threshold Limit – Rs.5,000

10%

NA

10%

NA

Section 194B: Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort Threshold Limit – Rs.10,000

30%

31.20%

30%

31.20%

Section 194BB: Income by way of winnings from horse races Threshold Limit – Rs.10,000

30%

31.20%

30%

31.20%

Section 194C: Payment to contractor/sub-contractor by:

  1. HUF/Individuals
  2. Others

Single Transaction to be taken as Rs. 30,000 & Aggregate of Transactions as Rs. 1,00,000

1% 2%

NA

1% 2%

NA

Section 194D: Insurance commission Threshold Limit for Individuals and Companies both – Rs.15,000

5%

NA

10%

NA

Section 194DA: Payment w.r.t life insurance policy Threshold Limit – Rs.1,00,000

5%

NA

5%

NA

Section 194E: Payment to non-resident sportsmen/sports association

NA

20.80%

NA

20.80%

Section 194EE: Payment in respect of deposit under National Savings scheme Threshold Limit – Rs.2,500

10%

10.40%

10%

NA

Section 194F: Payment on account of repurchase of unit by Mutual Fund or Unit Trust of India

20%

20.80%

20%

NA

Section 194G: Commission, etc., on sale of lottery tickets Threshold Limit – Rs.15,000

5%

5.20%

5%

5.20%

Section 194H: Commission or brokerage Threshold Limit – Rs.15,000

5%

NA

5%

NA

Section 194-I: Rent

  1. Plant & Machinery
  2. Land, Building, Furniture and Fittings

Threshold Limit – Rs.2,40,000

2% 10%

NA

2% 10%

NA

Section 194-IA: Payment on transfer of certain immovable property other than agricultural land Threshold Limit – Rs.50,00,000

1%

NA

1%

NA

Section 194-IB: Payment of rent by individual or HUF not liable to tax audit Threshold Limit – Rs.50,000 per month

5%

NA

NA

NA

Section 194-IC: Payment of monetary consideration under Joint Development Agreements

10%

NA

10%

NA

Section 194J: Any sum paid by way of

  1. Cases, wherein, the payee is engaged in the business of the operation of Call Centre only
  2. Fee for technical services
  3. Professional royalty where such royalty is in the nature of consideration for sale, distribution or exhibition of cinematographic film
  4. In case of fees for any other professional services
  5. In case the payee fails to furnish PAN Threshold Limit – Rs.30,000

2% 2% 10% 10% 20%

NA

2% 2% 10% 10% 20%

NA

Section 194K: Payment of any income in respect of

  1. Units of a Mutual Fund as per Section 10(23D)
  2. Units from the administrator
  3. Units from specified company

10%

NA

10%

NA

Section 194LA: Payment of compensation on acquisition of certain immovable property Threshold Limit – Rs.2,50,000

10%

NA

10%

NA

Section 194LB: Payment of interest on infrastructure debt fund

NA

5.20%

NA

5.20%

Section 194LBA(1): Business trust shall deduct tax while distributing, any interest received or receivable by it from a SPV or any income received from renting or leasing or letting out any real estate asset owned directly by it, to its unit holders.

10%

NA

10%

NA

Section 194LBA(2): Business trust shall deduct tax while distributing any interest income received or receivable by it from a SPV to its unit holders.

NA

5.20%

NA

5.20%

Section 194LBA(3): Business trust shall deduct tax while distributing any income received from renting or leasing or letting out any real estate asset owned directly by it to its unit holders.

NA

31.20%

NA

41.60%

Section 194LBB: Investment fund paying an income to a unit holder

10%

31.20%

10%

41.60%

Section 194LBC: Income in respect of investment made in a securitization trust

  1. In case of Individual/HUF
  2. Others

25% 30%

31.20%

10%

41.60%

Section 194M: Payment of commission, brokerage, contractual fee, professional fee to a resident person by an Individual or a HUF who are not liable to deduct TDS under section 194C, 194H, or 194J.

Threshold Limit – Rs.50,00,000

5%

NA

5%

NA

Section 194N:

  1. Filed the returns of income for all of the three assessment years relevant to the three previous years and cash withdrawals exceeding 1 crore
  2. Not Filed the returns of income for all of the three assessment years relevant to the three previous years: (This provision is applicable w.e.f. 01 July, 2020)
  • Cash withdrawals from 20 Lakhs to 1 crore
  • Cash withdrawals exceeding 1 crore

2% 2% 2% till 30 June, 2020 and 5% from 01 July, 2020

NA

2% 2% 2% till 30 June, 2020 and 5% from 01 July, 2020

NA

Section 194O: Applicable for E-Commerce operator for sale of goods or provision of service facilitated by it through its digital or electronic facility or platform.

Threshold Limit – Rs.5,00,000

1%

NA

1%

NA

Section 194Q : Purchase of goods Threshold Limit – Rs.50,00,000 Applicable when total sales or gross receipts or turnover from the business carried on exceeds Rs. 10 Crores during the financial year immediately preceding the financial year in which the purchase of goods is carried out.

0.10%

NA

0.10%

NA

Section 195: Payment of any other sum to a Non-resident

  1. Income in respect of investment made by a Non-resident Indian Citizen
  2. Income by way of long-term capital gains referred to in Section 115E in case of a Non-resident Indian Citizen
  3. Income by way of long-term capital gains
  4. Income by way of long-term capital gains as referred to in Section 112A
  5. Income by way of short-term capital gains referred to in Section 111A
  6. Any other income by way of long-term capital gains [not being long-term capital gains referred to in clauses 10(33), 10(36) and 112A
  7. Income by way of interest payable by Government or an Indian concern on moneys borrowed or debt incurred by Government or the Indian concern in foreign currency

A. Where the agreement is made after the 31st day of March, 1961 but before the 1st day of April, 1976 B. Where the agreement is made after the 31st day of March, 1976

  1. Income by way of royalty payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern where such royalty is in consideration for the transfer of all or any rights

A. Where the agreement is made after the 29th day of February, 1964 but before the 1st day of April, 1976 B. Where the agreement is made after the 31st day of March, 1976

  1. Income by way of royalty [not being royalty of the nature referred to point g) above E] payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern
  2. Income by way of fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian
  3. Any other income

NA

20.80% 10.40% 10.40% 10.40% 15.60% 20.80% 20.80% 10.40% 10.40% 10.40% 31.20%

NA

10.40% 10.40% 15.60% 20.80% 20.80% 10.40% 52% 10.40% 52% 10.40% NA NA 41.60%

 

What is the due date to Deposit TDS?

As per Section 200 of the Income Tax Act 1961, 'It is the duty of the deductor to deposit the TDS to the account of the government within the prescribed period.” The due date to deposit TDS is as follows:

Tax Deductor

Period

Due Date

Other Deductors

For the month of March

30th April for next Financial Year

Other Deductor and Government Office (With Challan)

For any other month

7th of the succeeding month

Please Note: The due date to deposit TDS is the same day when the deduction is made by the government offices if payment is made without the generation of challan.

Rule 30 also states that. "In special cases, the Assessing Officer may, with the prior approval of the Joint Commissioner, permit quarterly payment of the tax deducted under section 192 or section 194A or section 194D or section 194H for the quarters of the financial year" as follows:

Due Date to deposit TDS on a quarterly basis

Quarter Ending

Due Date

30th June

7th July

30th September

7th October

31st December

7th January

31st March

30th April

What is the due date to file TDS Return?

Rule 31A of the Income Tax Act, 1961 states that, 'every person who is responsible for deduction of tax is liable to file a quarterly statement of deduction of tax as per the following due dates.”

Quarter

Period

TDS Return

First Quarter

April-June

31st July of the Financial Year

Second Quarter

July-September

31st Oct of the Financial Year

Third Quarter

October- December

31st Jan of the Financial Year

Fourth Quarter

January-March

31st May of the next Financial Year

To download the TDS Rate Chart for FY 2021-22: Click here


  

Published by

Aishna Kukreja
(Others)
Category Income Tax   Report

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