In order to provide more relief to the tax payers for dealing with economic situation arising out of Covid-19 Pandemic, the Government has announced another fiscal measure to ensure more liquidity in the hands of the tax payer by reducing the rates of TDS/TCS on various payments by certain percentage points. This reduced rate of TDS/TCS shall apply to the specified list of payments including dividend, payment to contractors and sub-contractors, insurance commission, brokerage, rent for machinery and immovable property and professional fee s given in the Table below:
The following are the non-salaried specified payments made to residents as where TDS/TCS rate has been reduced by 25% for the period from 14th May, 2020 to 31st March, 2021:
|
EFFECTIVE TDS RATE F.Y. 2020-21 (A.Y. 2021-22) TILL 31ST MARCH 2021 |
|||||
| Section/Sub-Section |
Nature of Payment |
Threshold Limit, if any | TDR Rates | TDS Rates |
Remark |
| Upto 13th May 2020 | After 14th May 2020 | ||||
| 193 | Interest On Securities |
– |
– | – |
– |
| a | 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; |
– |
10% | 7.50% |
– |
| b | any debentures issued by a company where such debentures are listed on a recognised stock exchange in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and any rules made thereunder; |
– |
10% | 7.50% |
– |
| c | any security of the Central or State Government; [i.e. 8% Savings (Taxable) Bonds, 2003 and 7.75% Saving (Taxable) Bonds, 2018] |
10,000 |
10% | 7.50% |
– |
| d | interest on any other security |
– |
10% | 7.50% |
– |
| 194 | Dividend |
5,000 |
10% | 7.50% |
Threshold limit w.e.f. 1.4.2020 |
| 194A | Interest other than “interest on securities” – Others |
5,000 |
10% |
7.50% |
|
| Banks/ Co-Op Societies engaged in banking/ Post Office |
40,000 |
||||
| SENIOR CITIZEN (Interest Earned) |
50,000 |
||||
| Deposit with Banks | |||||
| Deposit with Post Office | |||||
| FD Scheme | |||||
| Recurring Deposit Schemes | |||||
| 194C |
Payment to Contractor / Sub Contractor |
Rs. 30,000 per contract or Rs. 1L aggregate P.A. |
– |
– |
– |
| a | HUF / Individuals |
1% |
0.75% |
– |
|
| b | Others |
2% |
1.50% |
– |
|
| 194D | Insurance Commission |
15,000 |
5% | 3.75% | – |
|
194DA |
Payment in respect of Life Insurance Policy – On the amount of Income comprised of Insurance Pay Out |
1,00,000 |
5% | 3.75% |
This TD was effective from 01-09-2019 |
| 194EE | Payment in respect of Deposit under National Savings Scheme |
2,500 |
10% | 7.50% |
– |
| 194F | Payment on account of repurchase of unit by Mutual Fund or Unit Trust of India |
– |
20% | 15% | – |
|
194G |
Commission etc (Sale of Lottery Tickets) |
15,000 |
5% | 3.75% |
– |
|
194H |
Commission or Brokerage |
15,000 |
5% | 3.75% |
– |
| 194I | RENT |
– |
– | – |
– |
| a | Plant & Machinery |
– |
2% | 1.50% | – |
|
b |
Land or Building or Furniture or Fitting |
– |
10% | 7.50% | – |
| 194-IA | Payment on transfer of certain immovable property other than agricultural land |
50,00,000 |
1% | 0.75% |
– |
| 194-IB | Payment of rent by individual or HUF not liable to tax audit |
– |
5% | 3.75% |
Where rent per month or part of the month exceeds Rs. 50,000 |
| 194-IC | Payment of monetary consideration under Joint Development Agreements |
– |
10% | 7.50% | – |
| 194 J | Payment for fees for Technical services, Professional services or royalty etc. |
30,000 |
– | – |
Per Annum |
| a | Cases, wherein, the payee is engaged in the business of the operation of Call Centre only (effective from 1st June 2017) |
– |
2% | 1.50% |
– |
| b | In case of fees for technical services (not being a professional royalty where such royalty is in the nature of consideration for sale, distribution or exhibition of cinematographic film) (effective from 1st April 2020) |
– |
2% | 1.50% |
– |
| c | Professional royalty where such royalty is in the nature of consideration for sale, distribution or exhibition of cinematographic film |
– |
10% | 7.50% | – |
| d | In case of fees for any other professional services |
– |
10% | 7.50% |
– |
| e | In case the payee fails to furnish PAN |
– |
20% | 20% | – |
| 194 K | Payment of any Income in respect of |
– |
– | – |
This Section is inserted by the Finance Act, 2020 and effective from 01-04-2020 |
| a | Units of a Mutual Fund as per Section 10(23D) |
– |
10% | 7.50% | |
| b | Units from the administrator |
– |
10% |
7.50% |
|
| c | Units from specified company |
– |
10% |
7.50% |
|
| 194 LA | Payment of compensation on acquisition of certain immovable property |
2,50,000 |
10% | 7.50% |
– |
| 194 LB (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% | 7.50% |
– |
| 194 LBB | Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)] |
– |
10% | 7.50% | – |
| 194 LBC | Income in respect of investment made in a securitisation trust (specified in Explanation of section 115TCA) |
– |
25% | 18.75% |
Individual or HUF |
|
– |
30% | 22.50% |
Other Resident Person |
||
|
– |
10% | 7.50% |
Domestic Companies |
| 194 M | Payment of commission (not being insurance 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. |
50,00,000 |
5% | 3.75% |
This Section was effective from 01-09-2019 |
| 194 O | Applicable for E-Commerce operator for sale of goods or provision of service facilitated by it through its digital or electronic facility or platform. |
– |
1% | 0.75% |
Introduced in Finance Act, 2020 and effective from 1st October 2020 |
| If PAN Not Produced |
– |
5% | 5% |
– |
| NOTE | There is no change or reduction in other Sections of Deduction at Source (For eg. Sections related to TDS on payment to NRI) |
| Surcharge, as applicable (on reduced rates) |
|
EFFECTIVE TDS RATE F.Y. 2020-21 (A.Y. 2021-22) TILL 31ST MARCH 2021 |
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|
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| Section/Sub-Section | Nature of Payment | Threshold Limit, if any | TDR Rates | TDS Rates |
Remark |
| Upto 13th May 2020 | After 14th May 220 | ||||
| 206C(1) | SALE OF |
– |
– | – |
– |
| a | Tendu Leaves |
– |
5% | 3.75% |
– |
| b | Timber (under Forest Lease) |
– |
2.50% | 1.88% |
– |
| c | Timber any other mode |
– |
2.50% | 1.88% | – |
|
d |
Other Forest Produces (Other than Tendu & Timber) |
– |
2.50% | 1.88% | – |
|
e |
Scrap |
– |
1% | 0.75% |
– |
| f | Minerals (Coal or Ignite or Iron Ore) |
– |
1% |
0.75% | – |
|
206C(1C) |
GRANT OF LICENSE OR LEASE |
– |
– | – |
– |
| a | Parking Lot |
– |
2% | 1.50% |
– |
| b | Toll Plaza |
– |
2% | 1.50% |
– |
| c | Mining and Quarrying |
– |
2% | 1.50% |
– |
| 206C(1F) | Sale of Motor Vehicle above Rs. 10 Lakhs |
– |
1% | 0.75% |
– |
| 206C (1H) | Sale of any other Goods |
– |
0.10% | 0.08% |
This Section was inserted in the Finance Act, 2020 and Effective from 1-10-2020 |
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