What is TDS and TDS Rates Chart?
TDS means Tax Deducted at Source. So when Income is paid or credited to payee (whichever is earlier), payer has to deduct tax at specified rate and pay balance amount to payee. Payer has to pay TDS to Government within due date of payment of TDS. As per Income tax Act, It is necessary to understand who is liable to deduct TDS , Which type of income liable for TDS and to whom it is paid in order to decide applicability of TDS vis-a-vis rate of TDS.
TDS provision is 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 . e.g. If you have Fixed Deposit with Bank and bank has deducted TDS on FD Interest Income @ 10% . You have to offer the same Interest as Income in your ITR and pay tax according to your tax slab. This TDS rates chart will provide you quick guide for deduction however please refer income tax Act for detailed provision of section.
TDS rates as amended by Finance Bill,2019 I & II are provided below in easy to refer TDS rates chart.
TDS Rates Chart for FY 2019-20 ( AY 2020-21)
| 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 ([i.e. 8% Savings (Taxable) Bonds, 2003 and 7.75% Saving (Taxable) Bonds, 2018]) | 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 |
40,000 (other than Senior citizen) 50,000 (Senior Citizen) |
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% (w.e.f. 01.09.2019,TDS shall be deductible at the rate of 5% only on the income component of life insurance payment instead of existing rate of TDS of 1% on the gross amount. |
| 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 | 2,40,000 | 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: | 2,40,000 | 10% |
| 22 | 194IA | Payment to resident on transfer of Immovable property (other than agriculture land) -Refer Note-4 | 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, |
| 31 | 194M | on the sum, or the aggregate of sums, paid or credited in a year on account of contractual work or professional fees by an individual or a Hindu undivided family, not required to deduct tax at source under section 194C and 194J of the Act |
50,00,000 |
5% (w.e.f. 01.09.2019, applicable for Individual or HUF payer . TDS can be deposited with PAN (without TAN) |
| 32 | 194N | Levy TDS on cash payments in excess of one crore rupees in aggregate made during the year, by a banking company or cooperative bank or post office, to any person from an account maintained by the recipient. |
1,00,00,000 |
2% (w.e.f 01.09.2019) |
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.
- Surcharge ,Education Cess and Secondary and Higher Education Cess will be added whenever it is applicable .
- Finance Bill No.2 of 2019: Amendment is made in the Explanation to section 194-IA and provide that the term “consideration for immovable property” shall include all charges of the nature of club membership fee, car parking fee, electricity and water facility fees, maintenance fee, advance fee or any other charges of similar nature, which are incidental to transfer of the immovable property. So apart from consideration for property above items are also required to be included for TDS with effect from 01.09.2019.
- Above given TDS Rates Chart for FY 2019-20 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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Please refer our below post to check key highlights of Finance Bill 2019 (No.2)
Finance Bill 2019 (No.2) – Budget Highlights
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