TDS – Tax Deducted at Source

TDS

TDS is means of indirect tax collection by the income tax authorities in India, under the provision of the Income Tax Act, 1961. TDS is managed by the Central Board of Direct Taxes (CBDT) and is part of the Department of Revenue managed by Indian Revenue Service (IRS). Any payment covered under these provisions shall be paid after deducting prescribed percentage.

Payments such as salary, lottery or game-winning, bank interest, rent, payment of commissions, income from house racing etc. fall under the provisions of Tax Deducted at Source. When making payments under these segments, a percentage of the payment is withheld by the source that is making the payments.

TDS Rates

Following are the TDS rates for a person other than a company w.e.f 01.06.2016.

IT Section Description TDS Rate Threshold Limit
Section 192 Salary payment.Normal Slab Rate.Normal Slab Rate.
Section 192APayment of accumulated balance of provident fund which is taxable in the hands of an employee10%₹50,000
Section 193 Interest on Securities

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.

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.

any security of the Central or State Government. interest on any other security.

 10%Nil
Section 194Dividend other than the dividend as referred to in Section 115-O.10%Nil
Section 194AIncome by way of interest other than “Interest on securities”. 10%₹10,000
Section 194BIncome by way of winnings from lotteries, crossword puzzles, card games and other games of any sort.30%₹10,000
Section 194BBIncome by way of winning from horse races.30%₹10,000
Section 194CPayment to contractor/sub-contractor.

Individual/HUF.

Others.

1%

2%

Aggregate annual limit₹1,00,000
Section 194DInsurance commission.10%₹15,000
Section 194DAPayment in respect of the life insurance policy.1%₹l lakh
Section 194EEPayment in respect of deposit under National Savings Scheme.10%₹2,500
Section 194FPayment on account of repurchase of the unit by Mutual Funds or Unit Trust of India.20%Nil
Section 194GCommission, etc., on a sale of lottery tickets.5% ₹15,000
Section 194HCommission or brokerage.5%₹15,000
Section 194-IRent

Plant & Machinery.

Land or building or furniture or fitting.

2%

10%

₹1.8 lakhs
Section 194-IAPayment on transfer of certain immovable property  other than agricultural Land.1% ₹50 lakhs
Section 194J Any sum paid by way of

Fee for professional services.

Fee for technical services.

Royalty.

Remuneration/fee/commission to a director or

For not carrying out any activity in relation to any business.

For not sharing any know-how, patent, copyright etc.

10%Nil
Section 194LAPayment of compensation on acquisition of certain  immovable property.10%₹1 lakh

Recommended Read:-

Form 15G and Form 15H 

Income Tax Form 16 and Form 16A

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