What is TDS?

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/

Due to Covid-19 situation, the rates of TDS on payments made to resident Indian has been reduced by 25% for the period starting from 14th May, 2020 to 31st March, 2021. However, there shall be no reduction in rates, where tax is required to be deducted or collected at higher rate due to non-furnishing of PAN/Aadhaar.

Now, let’s have a look at the TDS/TCS Rates applicable for financial year 2020-21 as per Press Release issued by Ministry of Finance dated 13th May, 2020:

TDS Rate Chart for F.Y. 2020-21 (A.Y: 2021-22)

Section

Nature of payment

Threshold Limit

Applicable from 01/04/2020 to 13/05/2020

Applicable from 14/05/2020 to 31/03/2021

 

 

 

Resident

Non-resident *

Resident

Non-resident *

 

 

Rs. 

TDS Rate (%)

TDS Rate (%)

TDS Rate (%)

TDS Rate (%)

192

Salaries

-

Normal slab rate

Normal slab rate

Normal slab rate

Normal slab rate

192A

Premature withdrawal from EPF

50000

10

10

10

10

193

Interest on securities - 8% Savings (Taxable) Bonds, 2003 or 7.75% Savings (Taxable) Bonds, 2018 during the financial year

10000

10

-

7.5

-

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

-

7.5

-

194

Dividends

5000

10

-

7.5

-

194A

Interest (Banking co., co-operative society engaged in banking, post office)

40000

10

-

7.5

-

194A

Interest (Any other person)

5000

10

-

7.5

-

194B

Winning from lotteries

10000

30

30

30

30

194BB

Winning from Horse race

10000

30

30

30

30

194C

Contractor-Single

transaction-Individual/HUF

           -Others

30000

 

1

2

 

-

-

 

0.75

1.5

 

-

-

194C

Contractor – Consolidated Payment During the F.Y.

- Individual/HUF

- Others

100000

 

 

1

2

 

 

-

-

 

 

0.75

1.5

 

 

-

-

194D

Insurance commission

- Other than Company

- Company

15000

 

5

10

 

-

-

 

3.75

10

 

-

-

194DA

Maturity of Life insurance policy

100000

5

-

3.75

-

194E

Non-resident sportsmen or sports association

-

-

20

-

20

194EE

NSS

2500

10

10

7.5

10

194F

Repurchase units by MFs

-

20

20

15

20

194G

Commission-Lottery

15000

5

5

3.75

5

194H

Commission/Brokerage

15000

5

-

3.75

-

194I

Rent of - Plant/Machinery /Equipment

- Land and Building/Furniture & Fixture

240000

2

10

-

-

1.5

7.5

-

-

194IA

Transfer of certain immovable property other than agriculture land

50 lakh

1

-

0.75

-

194IB

Rent by Individual/HUF

50000 per month

5

-

3.75

-

194IC

Payment under Joint Development Agreements to Individual/HUF

-

10

-

7.5

-

194J

Professional Fees

30000

10

-

7.5

-

194J

Technical Fees (w.e.f. 01.04.2020)

30000

2

-

1.5

-

194J

Payment to call centre operator (w.e.f. 01.06.2017)

30000

2

-

1.5

-

194J

Director's fees

-

10

-

7.5

-

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

-

7.5

-

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

-

7.5

-

194LB

Income by way of interest from infrastructure debt fund

-

-

5

-

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

 

7.5

 

7.5

 

5

 

10

194LBA

Distribution of rental income to unit holders

- Other than Comapany

- Company

-

 

 

10

10

 

 

30

40

 

 

7.5

7.5

 

 

30

40

194LBB

Income in respect of units of investment fund

- Other than Company

- Company

-

 

 

10

10

 

 

30

40

 

 

7.5

7.5

 

 

30

40

194LBC

Income in respect of investment in securitization fund

- Individual/HUF

- Company

- Other Person

-

 

 

25

30

30

 

 

30

40

30

 

 

18.75

22.5

22.5

 

 

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

-

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

-

4

194LD

Interest on certain bonds from Govt. securities

-

-

5

-

5

194M

Certain payments by Individual/HUF

50 lakh

5

-

3.75

-

194N

Payment of certain amount in cash

1 Crore

2

2

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 (Applicable from 01.07.2020)

 

 

 

N.A.

 

N.A.

 

 

N.A.

 

N.A.

 

 

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 (Applicable from 01.10.2020)

-

N.A

-

0.75

-

195

Income of Investment made by an NRI

-

-

20

-

20

195

Long-term capital gain

- Under Section - 115E/

112(1)(c)(iii)/112A

- Any Other Gains

-

 

 

-

-

 

 

10

20

 

 

-

-

 

 

10

20

195

Short-term capital gain - 111A

-

-

15

-

15

195

Royalty

-

-

10

-

10

195

Fees for technical services

-

-

10

-

10

195

Interest income payable by Govt./Indian concern (other than section 194LB or 194LC)

-

-

20

-

20

195

Any Other Income - Other than Company

                 - Company

-

-

 

-

30

 

40

-

 

-

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

-

20

196B

Income from units to an offshore fund

-

-

10

-

10

196C

Income from foreign currency bonds or GDR of an Indian company

-

-

10

-

10

196D

Income of foreign Institutional Investors from securities (not being dividend or capital gain)

-

-

20

-

20

* TDS rate shall be increased by applicable surcharge and Health & Education Cess.

Note: 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.

TCS Rate Chart for F.Y. 2020-21 (A.Y: 2021-22)

Section

Nature of payment

Applicable from 01/04/2020 to 13/05/2020

TCS Rate (%)

Applicable from 14/05/2020 to 31/03/2021

TCS Rate (%)

206C

Scrap

1

0.75

206C

Tendu leaves

5

3.75

206C

Timber obtained under a forest lease or other mode

2.5

1.875

206C

Any other forest produce not being a timber or tendu leaves

2.5

1.875

206C

Alcoholic liquor for human consumption and Indian made foreign liquor

1

1

206C

Parking lot, toll plaza, mining and quarrying (other than mining and quarrying of mineral oil, petroleum and natural gas)

2

1.5

206C

Minerals, being coal or lignite or iron ore

1

0.75

206C

Sale of motor vehicle of the value exceeding Rs. 10 Lacs

1

0.75

206C

Remittance out of India under the Liberalized Remittance Scheme of the RBI of the value exceeding 7 Lacs in a financial year (Applicable from 01.10.2020) – TCS will be charged on excess amount over 7 lacs

N.A.

5

206C

Sale of overseas tour programme package (Applicable from 01.10.2020)

N.A.

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 (Applicable from 01.10.2020) – TCS will be charged on excess amount over 7 lacs

N.A.

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 (Applicable from 01.10.2020) – TCS will be charged on excess amount over 50 lacs

N.A.

0.075

Note: 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.

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