TDS & TCS Rates (Part 1) – Budget 2019

Sr.

Payments to

Resident Payee

Criteria for

Deduction

Section

Company

Rate (%)**

Partnership Firm

Rate (%)**

Individual, HUF, AOP,

BOI Rate (%)**

1

Pre- mature withdrawal from Employee Provident Fund Scheme (Note 1)

Payment in excess of Rs. 50,000/-

192A

–

–

10

2

Interest on Securities (Note 2 & Note 3)

Payment in excess of Rs. 10,000/-

193

10

10

10

3

Interest on Bank Deposits, Cooperative society carrying on banking business and Deposits with Post Office for Senior Citizens (Note 4)

Payment in excess of Rs. 50,000/- per financial year (For Senior Citizens)

194A

10

10

10

 

Interest on Bank Deposits, Cooperative society carrying on banking business and Deposits with Post Office (Note 4) (For Others)

Payment in excess of Rs. 40,000/- per financial year (For Others)k

194A

10

10

10

 

Other Interest

Payment in excess of Rs. 5,000/- per financial year

194A

10

10

10

4

Winnings from Lotteries, crossword, puzzles, card games and other games of any sort

Payment in excess of Rs. 10,000/-

194b

30

30

30

5

Winnings from Horse Race

Payment in excess of Rs. 10,000/-

194BB

30

30

30

6

Payments to Contractors (Note 5)

Payment in excess of Rs. 30,000/- per transaction or Rs. 1,00,000/- per financial year

194C

2

1

1

7

Insurance Commission

Payment in excess of Rs. 15,000/- per financial year

194D

5

5

5

8

Sum received for Life Insurance Policy including bonus [ except exempt u/s 10(10D)] (Note 6)

Payment in excess of Rs. 1,00,000/- per financial year

194DA

5

5

5

9

Payments in respect of deposits under National Savings Scheme, etc Central Government Schemes

Payment in excess of Rs. 2,500/- per financial year

194EE

10

10

10

10

Payments on account of repurchase of units by Mutual Fund or Unit Trust of India.

No Threshold Limit

194F

–

–

20

11

Commission on Sale of Lottery Tickets

Payment in excess of Rs. 15,000/-

194G

5

5

5

2

Other Commission/ Brokerage

Payment in excess of Rs. 15,000/- per financial year

194H

5

5

5

13(a)

Rent for Plant & Machinery, Equipments

Payment in excess of Rs. 2,40,000/- per financial year

194-I(a)

2

2

2

13(b)

Rent for Land or Building or Furniture or Fittings

Payment in excess of Rs. 2,40,000/- per financial year

194-I(b)

10

10

10

13

Income by way of Rent from SPV distributed by REITs (Note 7)

No Threshold Limit

194-I

–

–

–

14

Consideration for Transfer of Immovable Property (other than Agricultural Land) (Note 8)

Sale Consideration exceeds Rs. 50,00,000/-

194-IA

1

1

1

15

Income by way of Rent (Note 9 &10 )

Rent exceeds Rs. 50,000 p.m. or part thereof

194-IB

5

5

5

16

Monetary Payment in respect of Joint Development Agreement

No Threshold Limit

194-IC

10

10

10

17(a)

Professional Fees / Royalties/ Fees for Technical Services

Payment in excess of Rs. 30,000/- p.a.

194J

10

10

10

17(b)

Professional Fees (for certain payees) (Note 11)

Payment in excess of Rs. 30,000 p.a.

194J

2

2

2

18

Consideration for Compulsory Acquisition of Immovable Property (other than Agricultural Land)

Payment in excess of Rs. 2,50,000/-

194LA

10

10

10

19

Income by way of Interest distributed from SPV distributed by Business Trusts i.e. REITs & INVITs

No Threshold Limit

194LBA

10

10

10

20

Income other than business income distributed by an Alternate Investment Fund (Category I and II)

No Threshold Limit

194LBB

10

10

10

21

Income in respect of investment in Securitization Trust

No Threshold Limit

194LBC

30

30

25

22

Payments to Contractors/ Professionals (Other than those covered in 194 C &194J) (Note: 12)

Payment in excess of Rs. 50,00,000/- or aggregate of such payment exceeding Rs. 50,00,000/-, during a financial year

194M

5

5

5

23

Payment by a Banking company /Banking Institution/ Cooperative society engaged in banking business/ post office. (Note 13)

Cash withdrawals or aggregate of such withdrawals in excess of Rs. 1,00,00,000/- from an account maintained by a recipient, during the previous year .

194N

2

2

2

Notes

1

TDS to be deducted at maximum marginal rate in case PAN is not furnished by the deductee.

2

In case payment of interest on listed debentures to individuals and HUF TDS is required to be deducted on payments in excess of Rs. 5,000/-

3

TDS is required to be deducted for interest on 7.75% Savings (Taxable ) Bonds, 2018 exceeding Rs. 10,000/- during the financial year

4

For interest on Bank Deposits and Deposits with Post Office, the threshold limit is Rs 50,000/- for senior citizens and Rs. 40,000/- for others.
– Also applicable on payment of Interest on time deposits by co-operative banks to its members and payment of interest on Recurring Deposit
– Computation of interest income shall be made taking into account income credited or paid by the bank (including all branches) who has adopted core banking solutions. – Computation of interest income shall be made taking into account income credited or paid by the bank (including all branches) who has adopted core banking solutions.

5

No TDS on payment made to contractor who owns ten or less goods carriage at any time during the year and furnishes PAN.

6

Presently, section 194DA prescribes for deduction of tax at source at the rate of 1% on the gross amount received by a resident under a life insurance policy. It is proposed to amend section 194DA to provide for deduction of tax at source at the rate of 5% of the amount chargeable to Income Tax.

7

No deduction shall be made under section 194-I of the Act where the income by way of rent is credited or paid to a Real Estate Investment Trust.

 

No TDS is required to be deducted on remittance of Passenger Service Fees by an Airline to Airline Operator (Circular No. 21/2017)No TDS is required to be deducted on remittance of Passenger Service Fees by an Airline to Airline Operator (Circular No. 21/2017)

8

W.e.f. 01/09/2019, new clause “aa” has been inserted to Section 194-IA’s explanation, whereby the term “Consideration for immovable property” has been defined :”to include all charges of the nature of club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee or any other charges of similar nature, which are incidental to transfer of the immovable property”

9

Provisions of Section 194-IB are applicable in cases where the deductor is individuals or HUFs other than those covered by Tax Audit u/s 44AB in immediately preceding financial year, subjects to the threshold and other conditions.

10

Deduction u/s 206AA shall not exceed Amount of Rent payable for last month of previous year (March) or last month of tenancy, as the case maybe.

11

TDS is to be deducted u/s 194J @ 2% where the payee is only engaged in the business of operation of call centre.

 

Any payments to a director of a company other than those which are “salaries” are specifically covered u/s 194J.

12

New Section 194M shall come into effect from 01/09/2019, and shall be applicable only to person, being an individual or a Hindu undivided family (other than those who are required to deduct income-tax as per the provisions of section 194C or section 194J).

13

New Section 194N shall come into effect from 01/09/2019. Also the section shall not apply to any payments made to Government, Banking company, Co-operative society engaged in Banking business, Business correspondent/ White label automated teller machine operator of such Banking company or Co-operative society.

14

In cases in which tax has to be deducted under sections 193, 194, 194A, 194B, 194BB, 194D,194LBA, 194LBB, 194LBC,192A, 194C, 194DA, 194E, 194EE, 194F,194G, 194H, 194-I, 194-IA, 194-IB, 194-IC, 194J, 194LA, 194LB, 194LBA, 194LBB, 194LBC, 194LC,194LD, 194M, 194N, 196B, 196C, 196D and 195 the rate at which the tax is to be deducted shall be increased by applicable surcharge.

**

TDS shall be deducted u/s 206AA @ 20% or the higher rate as provided under the Act, if PAN is not furnished by the deductee

**

No TDS is required to be deducted in case where the payee is an entity whose income is exempt u/s 10 and is not required to file returns as per Section 139. (Circular No. 18/2017)

**

Certificate for deduction at lower rate can be applied for Sections 192, 193, 194, 194A, 194C, 194D, 194G, 194H, 194-I, 194J, 194K, 194LA, 194LBB, 194LBC, 194M.

**

Certificate for nil rate of tax deduction can be applied for Sections 194, 194EE, 192A, 193, 194A, 194DA, 194K, 194-I.

**

No TDS where the deductee furnishes a self- declaration in Form 15G/ 15H for deduction of tax under Sections 194, 194EE, 192A, 193, 194A, 194D, 194DA, 194-I and 194K.

**

As per Section 196, no deduction of tax shall be made by any person from any sums payable to Government, RBI, a Corporation established under Central Act, a Mutual Fund specified under section 10(23D).