A Comprehensive Guide on Rates of TDS applicable for Financial Year 2021-22 or Assessment Year 2022- 23
Rates of TDS applicable for Financial Year 2021-
22 or Assessment Year 2022- 23
Section
Nature of Payment
Limit
Individual
Company
No Pan
192
Salaries (R+NR)
-
Slab Basis
-
30%
192A
Premature withdrawal from RPF (R+NR)
50,000
10%
-
20%
193
Interest on Securities
2,500
10%
10%
20%
193
Interest on 7.75% GOI Savings (Taxable) Bonds 2018
10,000
10%
10%
20%
193
Interest on Debenture
5,000
10%
10%
20%
194
Dividends other than referred in Sec.115-O
5,000
10%
10%
20%
194A
(Note 1)
Interest other than interest on securities – Banks Time deposits, Recurring deposit and Deposit in Co-op Banks
For Sr. Citizen up to Rs. 50,000 No TDS
40,000
10%
10%
20%
194B
Winning from Lottery/ Games (R+NR)
10,000
30%
30%
30%
194BB
Winning from Horse Races (R+NR)
10,000
30%
30%
30%
194C
(Note 1)
Contractor- Single Payment
30,000
1%
2%
20%
194C
(Note 1)
Contractor- In Whole year
1,00,000
1%
2%
20%
194C
(Note 1&2)
Contract – Transporter not covered under 44AE
30,000/ 75,000
1%
2%
20%
194D
Insurance Commission
15000
5%
10%
20%
194DA
(Note 3)
Maturity Proceeds of Life Insurance Policy
1,00,000
5%
5%
20%
194E
Payment to Non Resident Sportsmen or Sports association (NR)
-
20%
20%
20%
194EE
Deposit under National Savings Scheme (R+NR)
2,500
10%
10%
20%
194F
Repurchase units by MFs (R+NR)
-
20%
20%
20%
194G
Commission on sale of Lottery tickets (R+NR)
15,000
5%
5%
20%
194H
(Note 1)
Commission or Brokerage
15,000
5%
5%
20%
194I
(Note 1)
Rent- Land/Building & Fixtures
2,40,000
10%
10%
20%
194I
(Note1)
Rent- Plant & Machinery
2,40,000
2%
2%
20%
194IA
Property other than Agriculture Land
50,00,000
1%
1%
20%
194IB
Rent by Individual/HUF for Land or Building or Both
50,000 P.M.
5%
-
20%
194IC
Payment of Monetary Consideration under Joint Development Agreement Section 45(5A)
-
10%
10%
20%
194J
(Note 1)
Professional fees
30,000
10%
10%
20%
194J
Technical fees (w.e.f. 1.04.2020)
30,000
2%
2%
20%
194J
Payment to Call Centre Operator (w.e.f. 01.06.2017)
Royalty- in the nature of consideration for sale, distribution or exhibition of Cinematographic films
30,000
2%
2%
20%
194J
Director’s Fees
-
10%
10%
20%
194K
Payment of any income in respect of:
(a) Units of MF as per section 10(23D); or
(b) The unit from the administrator; or
(c) Units from specified company
(w.e.f. 01.04.2020)
5,000
10%
10%
20%
194LA
Compensation on Acquisition (Exempted if covered under RFCTLRR Act)
2,50,000
10%
10%
20%
194LB
interest from infrastructure debt fund (NR)
-
5%
5%
20%
194LBA
(Note 4)
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 (R+NR)
-
10%
10%
20%
194LBB
(Note 5)
Income in respect of unit of investment fund (R+NR)
-
10%
10%
30%
194LBC
(Note 6)
Income in respect of investment made in a securitization trust (R+NR)
-
25%
30%
30%
194LC
(Note 7)
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 (R+NR)
-
5%
5%
20%
194LD
(Note 8)
Interest on certain bonds and govt. Securities
-
5%
5%
20%
194M
Comm/Prof Fee/ Contract fee paid by individual/HUF not liable to deduct TDS u/s 194C, 194H, 194J
50,00,000
5%
5%
20%
194N
Cash Withdrawal from one or more account maintained by a person with a banking company, cooperative society engaged in business of banking or a post office. (Filed all ITRs for the past 3 years)
1,00,00,000
2%
2%
20%
194N
Cash Withdrawal from one or more account maintained by a person with a banking company, cooperative society engaged in business of banking or a post office(Not filed all ITRs for past 3 years)
20,00,000
1,00,00,000
2%
5%
2%
5%
20%
20%
194O
Applicable for ECommerce operator for sale of goods or provision of service facilitated by it through its digital or electronic facility or platform
-
1%
1%
20%
194P
TDS by specified bank in case of senior citizen having age of 75 or more
-
Slab Rates
-
-
194Q
(Note 9)
Purchase of Goods (w.e.f. 1.7.2021)
50,00,000
.1%
.1%
195
(Note 10)
Payment of any sum to Non resident
(NR)
-
-
-
Higher of Rate in force or Double Taxation Avoidance Act rate
196B
Income From Units (NR)
-
10%
10%
20%
196C
Income from foreign currency bonds or GDR (including long-term capital gains on transfer of such bonds) (not being dividend) (NR)
-
10%
10%
20%
196D
Income of FIIs from securities (NR)
-
20%
20%
20%
Note 1 :- The provisions of following TDS / TCS Sections, which were linked to applicability of Tax Audit provisions, shall now apply if the Gross Receipts / Turnover is INR 1 Crore or more for Business and INR 50 Lakhs or more for Profession:
o Section 194A, 194C, 194H, 194I, 194J and
o Section 206C
Thus, irrespective of applicability of Tax Audit provisions, TDS / TCS provisions, as mentioned above, shall apply.
Note 2 :- TDS is to be deducted at the rate of 2.0% if the payee is an AOP or BOI. TDS is not applicable on payment to Contractor engaged in plying, hiring or leasing of goods carriages, where such contractor owns 10 or less goods carriages during the Financial Year and furnishes amend definition of “work” to include purchase of raw material from associate of the customer. The word Associate shall have the same relations as stated u/s 40A(2)(b).
Note 3 :- Section 194DA is not applicable in case of amount is exempt u/s 10(10D) i.e. the Sum is received at the time of maturity of policy or Death benefit received. Form 15G/15H can be given wherever applicable
Note 4 :- Interest payment from a SPV and Distribution of dividend by
a Business Trust, to Resident unit holders shall be liable for TDS @ 10%.
Whereas, in case of Non-Resident payee, TDS on dividend shall be @ 10% &
that on interest payment shall be @ 5%.and
Note 5 :- Investment fund paying an income to a Non-Resident unit holder [other than income which is exempt under Section 10(23FBB)] is liable to deduct as TDS at the rate of 30% in case of NR individual or 40% in case of Foreign Company.
Note 6 :- Income in respect of investment made in a securitization trust paid to Non- Resident(specified in Explanation of section115TCA) is liable to deduct as TDS at the rate of 30% in case of NR individual or 40% in case of Foreign Company.
Note 7 :- The period of concessional rate of TDS of 5% has been extended till 1st July 2023 from existing 1st July 2020. The rate of TDS has been reduced to 4 % in case of interest payable to a Non-Resident on borrowings in foreign currency from a source outside India, by way of issue of any long term bond or Rupee Denominated Bonds on or after 1st April, 2020 but before 1st July, 2023 and which is listed only on a recognized stock exchange located in any IFSC.
Note 8 :- In case of FPI and QFI, the lower TDS rate of 5% has been extended to 1st July, 2023. The said concessional TDS rate shall also be applied to FII and QFI in respect of investment made in Municipal Bonds
Note 9 :- TDS on Purchase of Goods
- Presently, tax is collectible (TCS) by seller from buyer on goods exceeding INR 50 Lakhs by a specified seller
- It is now proposed to further provide for TDS on goods purchased from any resident, being seller, in following case:
|
Nature of payment made to resident |
Person Responsible to deduct tax |
Rate of TDS (PAN is Provided) |
Rate of TDS (PAN is Not Provided) |
Exceptions |
|
Purchase of goods (value or aggregate of
value of goods purchased > INR 50 Lakhs during the FY) |
Person being buyer whose total sales, gross
receipts or turnover from the business carried on by him > INR 10 Crores
during the FY immediately preceding the FY in which goods were purchased |
0.1% |
5% |
Tax is deductible under any other provision
of the Act Transaction on which tax is collectible under the provisions of
the Act other than sale of goods. |
Note:
- Notified category of persons will be exempt from deducting tax on above mentioned transaction.
- This provision will take effect from 1st July 2021.
- If on a transaction, TCS is required u/s 206C(1H) as well as TDS under this amended section, then only TDS under this section will apply
Note 10 :- Payment of any other sum to a Non-resident
|
a) |
Income in respect of
investment made by a Non-resident Indian Citizen |
20% |
|
b) |
Income by way of long-term
capital gains referred to in Section 115E in case of a Non-resident Indian
Citizen
|
10% |
|
c) |
Income by way of long-term
capital gains referred to in sub-clause (iii) of clause(c) of sub-Section (1)
of Section 112 |
10% |
|
d) |
Income by way of long-term
capital gains as referred to in Section 112A |
10% |
|
e) |
Income by way of short-term
capital gains referred to in Section 111A |
15% |
|
f) |
Any other income by way of
long-term capital gains [not being long-term capital gains referred to in
clauses 10(33), 10(36) and 112A |
20% |
|
g) |
Income by way of interest
payable by Government or an Indian concern on moneys borrowed or debt
incurred by Government or the Indian concern in foreign currency (not being
income by way of interest referred to in Section 194LB or Section 194LC) |
20% |
|
h) |
Income by way of royalty
payable by Government or an Indian concern in pursuance of an agreement made
by it with the Government or the Indian concern where such royalty is in
consideration for the transfer of all or any rights (including the granting
of a licence) in respect of copyright in any book on a subject referred to in
the first proviso to sub-section (1A) of Section 115A of the Income-tax Act,
to the Indian concern, or in respect of any computer software referred to in the
second proviso to sub-section (1A) of Section 115A of the Income-tax Act, to a
person resident in India |
10% |
|
i) |
Income by way of royalty [not
being royalty of the nature referred to point h) above] payable by Government
or an Indian concern in pursuance of an agreement made by it with the
Government or the Indian concern and where such agreement is with an Indian
concern, the agreement is approved by the Central Government or where it
relates to a matter included in the industrial policy, for the time being enforce,
of the Government of India, the agreement is in accordance with that policy |
10% |
|
j) |
Income by way of fees for
technical services payable by Government or an Indian concern in pursuance of
an agreement made by it with the Government or the Indian concern and where
such agreement is with an Indian concern, the agreement is approved by the
Central Government or where it relates to a matter included in the industrial
policy, for the time being in force, of the Government of India, the
agreement is in accordance with that policy |
10% |
|
k) |
Any other income |
30% |
Other Important Points
1. In case payee does not furnish PAN then TDS shall be deducted at higher of the following rates
- Rates specified in relevant provisions of the Act; or
- Rates in force; or 20%
In case of payment by E-Commerce Operator to E- Commerce Participant, 5% TDSshall apply instead of 20%.
These provisions will not be applicable for the following payments:
- Salary
- Accumulated Balance due to employee
- Winnings from lottery, crossword puzzle or horserace
- Income paid in respect of investment in securitization trust
- TDS by banks on cash withdrawals
3. Relaxation for withholding on payments to FII
Currently,
income of FII from securities is subject to TDS at a specific rate of 20%
without providing the benefit of DTAA at the time of tax deduction
In order to provide relaxation, it is proposed that tax shall be deducted at 20% or rate of tax as per DTAA for such income, whichever is lower, if the payee furnishes Tax Residency Certificate.
4. Exemption from TDS on payment of Dividend to Business trust
Presently,
section 194 of the Act provides for TDS on payment of dividend to Residents
Since
dividend income of Business Trust (REIT or Inv ITs) from SPV (Indian company
where the Business Trust holds controlling interest) is exempt, it is proposed
that TDS requirement shall not apply to such dividend payments. Certain
notified persons will also be entitled for such relaxation
The proposed amendment will be effective from AY 2021- 22 i.e. FY 2020-21
5. Deduction in respect of interest on affordable housing loan
Presently,
an Individual can claim deduction in respect of interest up to INR 1,50,000 on
loan taken for his first residential house property from financial institution
if such loan is sanctioned between 01.04.2019 to 31.03.2021 and Stamp duty
value of such house property does not exceed INR 45 Lakhs
To promote purchase of affordable housing, it is proposed to further extend the period of sanctioning of the said loan up to 31.03.2022.
6. Relaxation for certain category of senior citizen from filing Income-Tax Return
It is
proposed to provide relaxation to Resident Senior Citizens from filing the
return of income who fulfil the following conditions:
- They are aged 75 years or more during the FY,
- They only have pension income and interest income from the same Specified bank in which pension income is received and
- A prescribed declaration is furnished to the specified bank
|
Section |
Types of
Income |
|
192A |
TDS
on withdrawal from RPF |
|
193 |
TDS
on Interest |
|
194 |
TDS
on Dividends |
|
194D |
TDS
on Insurance Commission |
|
194DA |
Maturity/
Redemption of Life Insurance Policy |
|
194I |
TDS
on Rent |
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