TDS Rates: Tax Deducted at Source, is known as TDS. It is a tax where one is responsible for the deduction of tax for certain rendered services. The tax gets deducted from the total payment amount that goes to the government for various activities like infrastructure development, defence, etc. Depending on the type of service, a specific tax (TDS) is imposed that the payee is expected to deduct.
An employer can deduct tax at the source while paying to the employee and deduct tax from salaries at the time of payment. TDS will get deducted if an individual’s total income is taxable. However, and not get deducted if the total income is 2,50,000. This amount will be applicable to men and women who are below 60 years.
TDS deduction rate on salary starts from 5% to 30%, which is equal to the applicable income tax slabs.
|Section number||For the payment of||Individual||Others|
|192A||The payment of the balance due to an employee under the Employees Provident Fund Scheme, 1952||10%||10%|
|193||Interest on Debentures||10%||10%|
|194A||Interest other than on securities||10%||10%|
|194B||Winnings from lotteries/ games||30%||30%|
|194BB||Winnings from horse race||30||30|
|194C||Payment to contractor||1||2|
|194D||Payment of Insurance Commission||5||5|
|194DA||Payment under Life Insurance Policy||1||N/A|
|194E||Payment to non-resident sportsmen or sports association||20||20|
|194EE||Payment of NSS deposits||10||N/A|
|194F||Repurchase of units by Mutual funds or UTI||20||20|
|194G||Commission on sale of lottery tickets||5||5|
|194H||Commission or brokerage||5||5|
|194I||Rent of land, building and furniture||10||10|
|194I||Rent of plant and machinery||2||2|
|194IA||Purchase of immovable property||1||1|
|194IB||Rent payable by an individual||5||5|
|194IC||The payment of monetary consideration under Joint development agreement||10||10|
|194LA||Compensation on acquisition of immovable property||10||10|
|194LB||The payment of interest on infrastructure debt fund to non-resident||N/A||5|
|194LBA||Income from specific units of a business trust.||10||5|
|194LBB||Investment fund that pays an income to a unitholder (other than income which is exempt under section 10(23FBB)||10||10|
|194LBC||Investment income in securitization trust.||25||30|
|194LC||Payment of interest by an Indian company in respect of money borrowed in foreign currency under a loan agreement||N/A||5|
|194LD||Payment of interest on a rupee-denominated bond of an Indian company or Government securities to a foreign institutional investor||N/A||5|
|195||Others sums||Average rates||Average rates|
|196A||Income in respect of units of non-residents||N/A||10 for company, and 20 for person|
|196B||Income from units (including long term capital gains on transfer of such units) to an offshore fund||N/A||10|
|196C||Income which comes from foreign currency bonds or GDR (including long term capital gains on transfer of such bonds)||N/A||10|
|196D||Income of FIIs from securities||N/A||20|
Notes: No surcharge or education cess is levied on payments made to residents (Individuals / HUF / Society / AOP / Firm / Domestic Company). However, education cess is charged in case of salary.
TDS at a higher rate of 20% or TDS rate, whichever is higher, must be deducted if the deductee fails to provide PAN to the deductor.
If any taxpayer does not comply with the TDS rules, they will be liable to pay penalties in the form of and interest will be imposed on the principle taxable amount.