Over the years there is definite increase in scope of TDS provisions. TDS provision has really become key instrument for Government to get compliance with requirement of Income Tax Law. Assesses has to claim TDS in their Return of Income by mentioning their related taxable income .
Government has made some changes in TDS Provision in Finance Bill,2017 to bring parity in rates of TDS as one of objective.
TDS Rates Chart for FY 2017-18 ( AY 2018-19)
| Sr.No. | Sections | Nature of payments | Threshold limit in Rs. | Rates % |
| 1 | 192 | Income from Salary | Salary income exceed exemption limit of IT (Taxable Income) | Monthly -Deduct income-tax on the amount payable at the average rate of income-tax in force on the estimated income of the assessee for that financial year |
| 2 | 192A | Payment of accumulated balance of provident fund | 50,000 | 10% (In case of NO PAN, TDS at maximum marginal rate i.e. 30% |
| 3 | 193 | 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 | 5,000 | 10% |
| 4 | 193 | 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 there under | 5,000 | 10% |
| 5 | 193 | any security of the State or Central Government | 10,000 | 10% |
| 6 | 193 | Interest on any other security | 10,000 | 10% |
| 7 | 194 | Dividend other than the dividend as referred to in Section 115-O of Income Tax Act,1961 | 2,500 | 10% |
| 8 | 194A | Interest other than Interest on securities payable by bank, Co-operative Society engaged in business of banking or post office | 10,000 | 10% |
| 9 | 194A | Interest other than Interest on securities payable by Others | 5,000 | 10% |
| 10 | 194B | Wining from Lottery /Crossword Puzzles , card games and other games of any sort | 10,000 | 30% |
| 11 | 194BB | Wining from Horse Races | 10,000 | 30% |
| 12 | 194C | Payments to contractors/Sub Contractors for single transaction | 30,000 | 1% in case of Individuals/HUF, 2% in case of others |
| 13 | 194C | Payments to contractors for aggregate transactions during FY | 1,00,000 | 1% in case of Individuals/HUF, 2% in case of others |
| 14 | 194D | Insurance commission | 15,000 | 5% |
| 15 | 194DA | Payment in respect of Life Insurance Policies |
1,00,000 | 1% |
| 16 | 194EE | Payments out of deposits under NSS | 2,500 | 10% |
| 17 | 194F | Repurchase of units by Mutual Fund/UTI | – | 20% |
| 18 | 194G | Commission on sale of lottery tickets | 15,000 | 5% |
| 19 | 194H | Commission or Brokerage | 15,000 | 5% |
| 20 | 194I | Rent on machinery or plant or equipment | 1,80,000 | 2% |
| 21 | 194-I | Rent on any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings: | 1,80,000 | 10% |
| 22 | 194IA | Payment to resident on transfer of Immovable property (other than agriculture land) | 50,00,000 | 1% |
| 23 | 194IB | Payment of rent by individual or HUF not liable to tax audit | 50,000 p.a. or part of Month(w.e.f. 01.06.2017) | 5% |
| 24 | 194IC | Payment of monetary consideration as per Section 45(5A) | – | 10% |
| 25 | 194J | Any sum paid for i)Professional fees ii) Technical fees, iii) Royalty iv)For not carrying out any activity in relation to any business v)For not sharing any know-how, patent, copyright etc. |
30,000 | 10% (2% w.e.f. 01.06.2017 in case payee engaged in the business of operation of call centre ) |
| 26 | 194J | Any remuneration or commission paid to director of the company | – | 10% |
| 27 | 194LA | Compensation on acquisition of immovable property | 2,50,000 | 10% ( no deduction if payment cover U/S 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (30 of 2013) |
| 28 | 194LBA(1) | Business Trust to deduct TDS while distributing income in case of receipt of interest from SPA or income leasing or letting of any real asset owned directly to its unit holders being a resident | – | 10% |
| 29 | 194LBB | Income in respect of units of investment fund other than exempted income U/S 10(23FBB) | – | 10% in case of resident and at the rates in force, in case of non-resident or a foreign company: |
| 30 | 194LBC | Income in respect of investment made in a securitisation trust (specified in clause (d) of the Explanation occurring after section 115TCA) | – | 25% in case of Individual/HUF, 30% in case of other person |
Import Notes :
- Requirement to furnish Permanent Account Number as per Section 206AA: Payee has to furnish PAN to payer otherwise TDS will be deducted with higher of following rates:
i) at the rate specified in the relevant provision of this Act; or
(ii) at the rate or rates in force; or
(iii) at the rate of twenty per cent.
2. Surcharge ,Education Cess and Secondary and Higher Education Cess will be added whenever it is applicable .
3. Above given TDS Rates Chart for FY 2017-18 will work as ready reference when you are clear regarding TDS section which will be applied in your case . IF you are not clear about TDS section , it is suggested to take professional advice or refer Income Tax Act and Rules. To put this matter in right perspective , e.g. in real life scenario you may face difficulty regarding applicability of Section 194-C payment to contractor or 194-J Sum paid for professional services in your case . You may have to evaluate whether particular service fall under list of professional or technical services therefore it is suggested to have better understanding of TDS provisions to avoid any default in deduction of Tax at Source .
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