Tax Deducted at Source (TDS) is a mechanism that has been introduced by the Income Tax Department. Under this, the responsible person is supposed to deduct a certain percentage of income as tax before making the payment to the receiver. The payment includes salary, commission, professional fees, interest, rent, etc.
For detailed discussion on TDS, please visit: https://www.hostbooks.com/in/blog/tds/complete-guide-tax-deducted-source-tds/
Now, let’s have a look at the TDS/TCS Rates applicable for financial year 2021-22 as per Finance Bill 2021 presented by Finance Minister Smt. Nirmala Sitharaman dated on 1st February, 2021:
Section |
Nature of payment |
Threshold Limit Rs. |
Applicable from 01/04/2021 to 31/03/2022 |
|
|
|
|
Resident |
Non-resident * |
|
|
Rs. |
TDS Rate (%) |
TDS Rate (%) |
192 |
Salaries |
- |
Normal slab rate |
Normal slab rate |
192A |
Premature withdrawal from EPF |
50000 |
10 |
10 |
193 |
Interest on securities - 8% Savings (Taxable) Bonds, 2003 or 7.75% Savings (Taxable) Bonds, 2018 during the financial year |
10000 |
10 |
- |
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 |
- |
194 |
Dividends |
5000 |
10 |
- |
194A |
Interest (Banking co., co-operative society engaged in banking, post office) |
40000 |
10 |
- |
194A |
Interest (Any other person) |
5000 |
10 |
- |
194B |
Winning from lotteries |
10000 |
30 |
30 |
194BB |
Winning from Horse race |
10000 |
30 |
30 |
194C |
Contractor-Single transaction-Individual/HUF -Others |
30000 |
1 2 |
- - |
194C |
Contractor – Consolidated Payment During the F.Y - Individual/HUF - Others |
100000 |
1 2 |
- - |
194D |
Insurance commission - Other than Company - Company |
15000 |
5 10 |
- - |
194DA |
Maturity of Life insurance policy |
100000 |
5 |
- |
194E |
Non-resident sportsmen or sports association |
- |
- |
20 |
194EE |
NSS |
2500 |
10 |
10 |
194F |
Repurchase units by MFs |
- |
20 |
20 |
194G |
Commission-Lottery |
15000 |
5 |
5 |
194H |
Commission/Brokerage |
15000 |
5 |
- |
194I |
Rent of - Plant/Machinery /Equipment - Land and Building/Furniture & Fixture |
240000 |
2 10 |
- - |
194IA |
Transfer of certain immovable property other than agriculture land |
50 lakh |
1 |
- |
194IB |
Rent by Individual/HUF |
50000 per month |
5 |
- |
194IC |
Payment under Joint Development Agreements to Individual/HUF |
- |
10 |
- |
194J |
Professional Fees |
30000 |
10 |
- |
194J |
Technical Fees (w.e.f. 01.04.2020) |
30000 |
2 |
- |
194J |
Payment to call centre operator (w.e.f. 01.06.2017) |
30000 |
2 |
- |
194J |
Director's fees |
- |
10 |
- |
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 |
- |
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 |
- |
194LB |
Income by way of interest from infrastructure debt fund |
- |
- |
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 |
194LBA |
Distribution of rental income to unit holders - Other than Company - Company |
- |
10 10 |
30 40 |
194LBB |
Income in respect of units of investment fund - Other than Company - Company |
- |
10 10 |
30 40 |
194LBC |
Income in respect of investment in securitization fund - Individual/HUF - Company - Other Person |
- |
25 30 30 |
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 |
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 |
194LD |
Interest on certain bonds from Govt. securities |
- |
- |
5 |
194M |
Certain payments by Individual/HUF |
50 lakh |
5 |
- |
194N |
Payment of certain amount in cash |
1 Crore |
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 |
|
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 (w.e.f. 01.04.2020) |
- |
1 |
- |
194-P |
Deduction of tax in case of specified senior citizen. [Change will applicable from 1st April, 2021.] |
- |
Applicable rates in force |
- |
194-Q |
Payment of certain sum by the buyer to the seller (resident Indian) for purchase of goods [Change will applicable from 1st July, 2021.] |
50 lakh |
0.1 |
- |
195 |
Income of Investment made by an NRI |
- |
- |
20 |
195 |
Long-term capital gain - Under Section - 115E/112(1)(c)(iii)/112A - Any Other Gains |
- |
- - |
10 20 |
195 |
Short-term capital gain - 111A |
- |
- |
15 |
195 |
Royalty |
- |
- |
10 |
195 |
Fees for technical services |
- |
- |
10 |
195 |
Interest income payable by Govt./Indian concern (other than section 194LB or 194LC) |
- |
- |
20 |
195 |
Any Other Income - Other than Company - Company |
- |
- - |
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 |
196B |
Income from units to an offshore fund |
- |
- |
10 |
196C |
Income from foreign currency bonds or GDR of an Indian company |
- |
- |
10 |
196D |
Income of foreign Institutional Investors from securities (not being dividend or capital gain) |
- |
- |
20 |
* TDS rate shall be increased by applicable surcharge and Health & Education Cess.
Note: As per section 206AA, 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.
Note: As per new section 206AB, where tax is required to be deducted at source under the provisions of Chapter XVIIB, on any sum or income or amount paid, or payable or credited, other than sections 192, 192A, 194B, 194BB, 194LBC or 194N by a person to a specified person, the tax shall be deducted at the higher of the following rates.
Note: Provision of section 206AA (Non furnishing of PAN/Aadhaar) shall be override on the provision of section 206AB and then tax shall be deducted at higher of the two rates provided in section 206AA and in section 206AB.
[These change will be applicable from 1st July, 2021.]
Section |
Nature of payment |
Applicable from 01/04/2021 to 31/03/2022 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 leaves |
2.5 |
206C |
Alcoholic liquor for human consumption and Indian made foreign liquor |
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 |
1 |
206C |
Sale of motor vehicle of the value exceeding Rs. 10 Lacs |
1 |
206C |
Remittance out of India under the Liberalized Remittance Scheme of the RBI of the value exceeding 7 Lacs in a financial year |
5 |
206C |
Sale of overseas tour programme package |
5 |
206C |
Remittance out of India for education under the Liberalized Remittance Scheme of the RBI of the value exceeding 7 Lacs in a financial year |
0.5 |
206C |
Sale of any goods (other than goods exported out of India or goods given in the above points) of the value exceeding 50 Lacs |
0.1 |
Note: As per section 206CC, In case of non-furnishing of PAN/Aadhaar by collectee, TCS will be charged at twice of the normal rate applicable or 5% {1% in case of sale of any goods (given in the last point) of the value exceeding 50 Lacs}, whichever is higher.
Note: As per new section 206CCA, where tax is required to be collected at source under the provisions of Chapter XVII-BB, on any sum or income or amount paid, or payable or credited by a person to a specified person, the tax shall be collected at the higher of the following rates.
Note: Provision of section 206CC (Non furnishing of PAN/Aadhaar) shall be override on the provision of section 206CCA and then tax shall be collected at higher of the two rates provided in section 206CC and in section 206CCA.
[These change will be applicable from 1st July, 2021.]
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