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December 18, 2017
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December 23, 2017

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

Reason for Non Deduction / Lower /higher Deduction 24Q

Particulars Code
In case of lower deduction on account of certificate under section 197 A
In case of no deduction on account of certificate under section 197 B
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

Particulars Code
In case of lower deduction/no deduction on account of certificate under section 197 A
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 provided T
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

Particulars Code
In case of lower deduction or no deduction on account of certificate under section 197 A
In case of no deduction on account of declaration under section 197A 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”). 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

Particulars Code
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)

Section Nature of payment Threshold Indv./HUF Others
    Rs.  TDS Rate (%)
192 Salaries Normal slab rate
192A Premature withdrawal from EPF 50000 10
193 Interest on securities – 8% Savings (Taxable) Bonds, 2003 or 7.75% Savings (Taxable) Bonds, 2018 during the financial year 10000 10 10
193 Interest 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 cheque 5000 10 10
194 Dividends 2500 10 10
194A Interest (Banking co., co-operative society engaged in banking, post office) 40000 10 10
194A Interest (Banking co., co-operative society engaged in banking, post office), if payee is senior citizen 50000 10 10
194A Interest (Any other person) 5000 10 10
194B Winning from lotteries 10000 30 30
194BB Winning from Horse race 10000 30 30
194C Contractor – Single transaction 30000 1 2
194C Contractor – During the F.Y. 100000 1 2
194C Transporter (44AE) declaration with PAN
194D Insurance commission (15G-15H allowed) 15000 5 10
194DA Life insurance policy 100000 5 5
194E Non-resident sportsmen or sports association 20 20
194EE NSS 2500 10 10
194F Repurchase units by MFs 20 20
194G Commission-Lottery 15000 5 5
194H Commission/Brokerage 15000 5 5
194I Rent of Land and Building – F & F 240000 10 10
194I Rent of Plant/Machinery/Equipment 240000 2 2
194IB Rent by Individual/HUF to a resident  (wef 01.06.2017) 50000 pm 5 5
194IA Transfer of certain immovable property other than agriculture land 50 lakh 1 1
194J Professional Fees/Technical Fees/ etc. 30000 10 10
194J Payment to call centre operator (wef 01.06.2017) 30000 2 2
194J Director’s fees 10 10
194LA Compensation on transfer of certain immovable property other than agriculture land 250000 10 10
194LA Immovable property (TDS exempted under RFCTLARR Act wef 01.04.2017)
194LB Income by way of interest from infrastructure debt fund (non-resident)      [TDS + SC + HEC] 5 5
194LBA Income from units of business trust (if recepient is resident in India) 10 10
194LBA Income from units of business trust (if recepient is non-resident)      [TDS + SC + HEC] 5 5
194LBA Distribution of rental income to unit holders (if recepient is non-resident)     [TDS + SC + HEC] 30 40
194LBB Income in respect of units of investment fund (if payee is resident) 10 10
194LBB Income in respect of units of investment fund (if payee is non-resident)     [TDS + SC + HEC] 30 40
194LBC Income in respect of investment in securitization fund (if payee is resident) 25 30
194LBC Income in respect of investment in securitization fund (if payee is non-resident)   [TDS + SC + HEC] 30 40
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 (applicable from July 1, 2012      [TDS + SC + HEC] 5 5
194LD Interest on certain bonds from Govt. securities (from 01.06.2013)     [TDS + SC + HEC] 5 5
194M Certain payments by Individual/HUF 50 lakh 5 5
194N Payment of certain amount in cash 1 Crore 2

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)

Section Nature of Payment TCS Rate (%)
206C Scrap 1
206C Tendu Leaves 5
206C Timber obtained under a forest lease or other mode 2.5
206C Any other forest produce not being a timber or tendu leave 2.5
206C Alcoholic Liquor for human consumption 1
206C Parking lot, toll plaza, mining and quarrying (other than mining and quarrying of mineral oil, petroleum and natural gas) 2
206C Minerals, being coal or lignite or iron ore (applicable from July 1, 2012) 1
206C Sale 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.

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