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December 18, 2017

3. Option – Reason for non deduction / lower / higher TDS

Reason for Non Deduction / Lower /higher Deduction 24Q

ParticularsCode
In case of lower deduction on account of certificate under section 197A
In case of no deduction on account of certificate under section 197B
In case of deduction of tax at higher rate due to non-availability of PAN. TDS deducted amount in deductee details should not be less than 20% of Amount paid/ credited in this case. ‘C’ remark is allowed only if deductee PAN quoted is structurally invalid (i.e. “PANAPPLIED”, “PANINVALID” or “PANNOTAVBL”).C

Reason for Non Deduction / Lower /higher Deduction 26 Q

ParticularsCode
In case of lower deduction/no deduction on account of certificate under section 197A
In case of no deduction on account of declaration under section 197A. Allowed only for section 194, 194A, 194EE, 193, 194DA, 192A, 194I(a), 194I(b) & 194D (no deduction/lower deduction)B
In case of deduction of tax at higher rate due to non-availability of PAN ‘C’ remark is allowed only if deductee PAN quoted is structurally invalid. (i.e. “PANAPPLIED”, “PANINVALID” or “PANNOTAVBL”).C
In case of Transporter transaction and valid PAN is providedT
Transaction where tax has not been deducted as amount paid/credited to the vendor/party has not exceeded the threshold limit (as per the provisions of income tax act). Applicable for sections 193,194, 194A, 194B, 194BB, 194C, 194D, 194EE, 194G, 194H, 194I, 194J, 194LA.Y
For software acquired under section 194J (Notification 21/2012). Applicable from FY 2012-13 onwards.S
In case of no deduction on account of payment under section 197A (1F). Applicable from FY 2012-13 onwards.Z

Reason for Non Deduction / Lower /higher Deduction 27Q

ParticularsCode
In case of lower deduction or no deduction on account of certificate under section 197A
In case of no deduction on account of declaration under section 197AB
In case of deduction of tax at higher rate due to non-availability of PAN ‘C’ remark is allowed only if deductee PAN quoted is structurally invalid. (i.e. “PANAPPLIED”, “PANINVALID” or “PANNOTAVBL”). If the section code in the deductee details is 194LC then “C” remark is not applicable i.e., deduction of tax at higher rate is not applicable due to non-availability of deductee PAN.C
For software acquired under section 195 (Notification 21/2012). Applicable from FY 2012-13 onwards.S

Reason for Non Deduction / Lower /higher Deduction 27EQ

ParticularsCode
In case of lower collection as per section 206C (9)A
Non collection as per section 206C (1A)B
In case of deduction of tax at higher rate due to non-availability of PAN ‘C’ remark is allowed only if collectee PAN quoted is structurally invalid. (i.e. “PANAPPLIED”, “PANINVALID” or “PANNOTAVBL”). Applicable only for Section 206CC and statements pertains to FY 2017-18 onwards.

TDS RATE CHART FY: 2019-20 (AY: 2020-21)

SectionNature of paymentThresholdIndv./HUFOthers
  Rs. TDS Rate (%)
192SalariesNormal slab rate
192APremature withdrawal from EPF5000010
193Interest on securities – 8% Savings (Taxable) Bonds, 2003 or 7.75% Savings (Taxable) Bonds, 2018 during the financial year100001010
193Interest on securities – Interest payable to Individual or HUF, resident in India, on any debenture issued by a company in which the public are substancially interested, if such interest is paid by the company by an account payee cheque50001010
194Dividends25001010
194AInterest (Banking co., co-operative society engaged in banking, post office)400001010
194AInterest (Banking co., co-operative society engaged in banking, post office), if payee is senior citizen500001010
194AInterest (Any other person)50001010
194BWinning from lotteries100003030
194BBWinning from Horse race100003030
194CContractor – Single transaction3000012
194CContractor – During the F.Y.10000012
194CTransporter (44AE) declaration with PAN
194DInsurance commission (15G-15H allowed)15000510
194DALife insurance policy10000055
194ENon-resident sportsmen or sports association2020
194EENSS25001010
194FRepurchase units by MFs2020
194GCommission-Lottery1500055
194HCommission/Brokerage1500055
194IRent of Land and Building – F & F2400001010
194IRent of Plant/Machinery/Equipment24000022
194IBRent by Individual/HUF to a resident  (wef 01.06.2017)50000 pm55
194IATransfer of certain immovable property other than agriculture land50 lakh11
194JProfessional Fees/Technical Fees/ etc.300001010
194JPayment to call centre operator (wef 01.06.2017)3000022
194JDirector’s fees1010
194LACompensation on transfer of certain immovable property other than agriculture land2500001010
194LAImmovable property (TDS exempted under RFCTLARR Act wef 01.04.2017)
194LBIncome by way of interest from infrastructure debt fund (non-resident)      [TDS + SC + HEC]55
194LBAIncome from units of business trust (if recepient is resident in India)1010
194LBAIncome from units of business trust (if recepient is non-resident)      [TDS + SC + HEC]55
194LBADistribution of rental income to unit holders (if recepient is non-resident)     [TDS + SC + HEC]3040
194LBBIncome in respect of units of investment fund (if payee is resident)1010
194LBBIncome in respect of units of investment fund (if payee is non-resident)     [TDS + SC + HEC]3040
194LBCIncome in respect of investment in securitization fund (if payee is resident)2530
194LBCIncome in respect of investment in securitization fund (if payee is non-resident)   [TDS + SC + HEC]3040
194LCIncome 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 (applicable from July 1, 2012      [TDS + SC + HEC]55
194LDInterest on certain bonds from Govt. securities (from 01.06.2013)     [TDS + SC + HEC]55
194MCertain payments by Individual/HUF50 lakh55
194NPayment of certain amount in cash1 Crore2

In Case, TDS Rate is lower than 20% TDS Rate without PAN will be 20% flat (The above list covers most of the sections applicable for domestic transactions)

TCS RATE CHART FY: 2019-20 (AY: 2020-21)

SectionNature of PaymentTCS Rate (%)
206CScrap1
206CTendu Leaves5
206CTimber obtained under a forest lease or other mode2.5
206CAny other forest produce not being a timber or tendu leave2.5
206CAlcoholic Liquor for human consumption1
206CParking lot, toll plaza, mining and quarrying (other than mining and quarrying of mineral oil, petroleum and natural gas)2
206CMinerals, being coal or lignite or iron ore (applicable from July 1, 2012)1
206CSale of motor vehicle of the value exceeding Rs. 10 Lacs (wef 01.06.2016) Motor vehicle clause not applicable on Central Government, a State Government, an embassy, a High Commission, Legation, Commission, Consulate and the Trade Representation of a foreign State; Local Authority; a Public Sector Company which is engaged in the business of carrying passengers (wef 01.04.2017)1

TCS Rates (without PAN): double of the TCS rate as above or 5% (whichever is higher) (This list covers the sections that mainly applicable for domestic transactions)

Note:

  1. Surcharge (SC) and Heath and Education Cess (HEC) is not deductible on payments made to residents, other than salary.
  1. In case of non-resident, surcharge (SC) and Health and Education Cess (HEC) would be applicable on TDS.

1 Comment

  1. Bharatiya Vidya Bhavan says:

    Interested in relevant updates.

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