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TDS Rates

TDS Rate 2021

Last Updated 31st Oct 2020

TDS Rates after 13th May 2020 for some of the key payment types are:

Section Nature of Payment TDS Rate from 13th May 2020 to 31st March 2021.
192 Salary As per applicable slab rate
194 Dividend 7.50%
193 Interest on Securities 7.50%
INCOME TAX CALCULATOR

TDS Rate Chart

TDS or Tax Deducted at Source is a mechanism of deducting income tax at the source origin of taxable income. Under this income tax department has specified certain types of payment in case of which the payee needs to deduct a certain amount as specified for that expense at the time of making payment to the beneficiary.

Due to the spread of COVID-19 in the country, the Indian Government announced a relief package namely ‘Atma Nirbhar Relief Package’ on 13th May 2020. In this package, one of the points covered the reduction of TDS rates for various types of payments. The benefit announced in the Atma Nirbhar Package is applicable only for Resident Indians.

Revised TDS Rates for Residents till 31st March 2021

TDS Section Nature of Payment TDS Rate till 13th May, 2020 TDS Rate from 14th May 2020 to 31st March 2021
194 Dividend 10% 7.50%
194A Income earned as interest other than ‘Interest on securities’ 10% 7.50%
192 Salary Applicable slab rate Applicable slab rate
192A Premature withdrawal from EPF 10% 10%
193 Interest on Securities from - any debenture of security issued by any authority or corporation established by the government, listed debenture of a company, any security of State or Central government, or any other security 10% 7.50%
194B Income from lotteries, card games, puzzles, etc. 30% 30%
194BB Income from Horse races 30% 30%
194C Payment made to contractor/sub-contractor -
a) Individual or HUF
01% 0.75%
b) Others 02% 1.50%
194D Insurance commission paid -

a) Other than a company
05% 3.75%
b) To Company 10% 10%
194DA Sum paid to insured with regards to Life Insurance Policy 05% 3.75%
194EE National Saving Scheme 10% 7.50%
194F Repurchase of unit by MFs or UTIs 20% 15%
194G Commission on sale of lottery tickets 05% 3.75%
194H Commission/Brokerage 05% 3.75%
194I Rent for

a) Plant and Machinery
02% 1.75%
b) Land and Building or Furniture and Fitting 10% 7.50%
194IA Transfer of immovable property other than agricultural land 01% 0.75%
194IB Rent paid by an individual or HUF and not covered under Section 194I (above ₹ 50,000) 05% 3.75%
194IC Payment under Joint Development Agreement to Individuals/HUF 10% 7.50%
194J a) Any sum paid with respect to Professional fee or director’s fee 10% 7.50%
b) Payment made with respect to technical fee or as Royalty for the sale or distribution or exhibition of cinematographic films. 02% 1.75%
194K Payment made with respect to any of the following:

a) MF units as per section 10(23D).

b) Units from specified company, or

c) Units from administrator.
10% 7.50%
194LA Compensation for transfer of certain immovable property. 10% 7.50%
194LBA Specified income distributed by a business trust to its unit holder. 10% 7.50%
194LBB Income paid by investors fund to its investors 10% 7.50%
194LBC Income from investment in securitization of fund

a) For Individual/HUF
25% 18.75%
b) For Company or any other person 30% 22.50%
194M Certain payments made by HUF or Individual above ₹ 50 lakhs 05% 3.75%
194N Certain payments made in cash:

a) Amount more than ₹ 20 lakhs but less than ₹ 1 crore
N.A. 02%
b) Amount exceeds ₹ 1 crore (Applicable from 1st July, 2020) N.A. 05%
194O For E-commerce operators for sale of goods or provision of services facilitated by it through its digital platform (from 1st Oct, 2020) N.A. 0.75%

TDS Chart Applicable for Non Resident of India (NRIs)

For Non-Residents Indians there is no relief under the Atmairbhar package announced on 13th May 2020. Thus, the TDS rates applicable to non-residents remain the same throughout the year.

Section Nature of Payment TDS Rate
192 Salary Applicable slab rate
192A Premature withdrawal of EPF 10%
194B Income from lotteries, crossword puzzles, card games, etc. 30%
194BB Income from winning horse races 30%
194E Any payment made to non-resident sportsman/association 20%
194EE Payment with respect to deposits in National Savings Scheme 10%
194F Payment on account of repurchase of a unit by MF or UTI 20%
194G Commission on sale of lottery tickets 05%
194LB Interest of Infrastructure debt fund 05%
194LBA Income from business trust units -

a) Interest received or receivable from special purpose vehicle
05%
b) Dividend referred in section 115-O(7). 10%
194LBC Income from investment in securitization fund 30%
194LC Interest payment by indian company or business trust for loan availed in foreign currency. 05%
194LD Interest payment on bond of an Indian company or government security to a foreign investor 05%
194N Certain payments made in cash:

a) Amount more than ₹ 20 lakhs but less than ₹ 1 crore
02%
b) Amount exceeds ₹ 1 crore (Applicable from 1st July, 2020) 05%
195 Various Payments made to Non-Resident

a) Income on investment made by Non Resident Indian Citizen
20%
b) A long term capital gain referred to in Section 115E 10%
c) Long term capital gain referred to in Section 193(1)(c)(iii). 10%
d) Short term capital gain referred in section 111A 15%
e) Any other long term capital gain other than the gain referred in clauses (33), (36), and (38) of section 10 20%
f) Income from interest payable by government or Indian concern on a debt availed in foreign currency other than the income covered in Section 194LB and 194LC 20%
196A Income from MF units under clause (23D) of section 10, or from the specified company in clause (35) of section 10 20%
196B Income from units including long term capital gain or from transfer of units to offshore fund 10%
196C Income from foreign currency bond or GDR of Indian company 10%
196D Income of foreign institutional investors from securities 20%

TDS Rates Applicable on Domestic Company

Section Nature of Payment TDS Rate till 13th May, 2020 TDS Rate from 14th May, 2020 to 31st March, 2021
193 Interest on Securities 10% 7.50%
194 Dividend 10% 7.50%
194A Interest income other than interest on securities 10% 7.50%
194B Income from lotteries, crossword puzzles, card games, etc. 30% 30%
194BB Income from winning horse races 30% 30%
194C Payment to Contractor/sub-contractor - a) HUF/Individuals 01% 0.75%
b) Others 02% 1.50%
194D Insurance Commission 05% 3.75%
194DA Payment of Life Insurance Policy 05% 3.75%
194EE Payment with regards to deposit under National Saving Scheme 10% 7.50%
194F Repurchase of units by MF or UTIs 20% 15%
194G Commission on sale of lottery tickets 05% 3.75%
194H Commission or brokerage 05% 3.75%
194I Rent -

a) Plant and Machinery
02% 1.75%
b) Land and Building or Furniture and Fitting 10% 7.50%
194IA Payment on transfer of certain immovable property other than agricultural land 01% 0.75%
194IB Rent paid by individual or HUF not covered under Section 194I 05% 3.75%
194IC Payment under Joint Development Agreements to Individual or HUF 10% 7.50%
194J Payment made as -

a) Professional fee or director’s fee/remuneration
10% 7.50%
b) Technical fee or Royalty for sale/distribution/exhibition of a cinematography films 02% 1.75%
194LBA Income distributed by a business trust to its unit holders 10% 7.50%
194LA Payment for acquisition of certain immovable property 10% 7.50%

TDS Rates Applicable for Non Domestic Company

The reliefs with regards to TDS announced on 13th May 2020 under the Atma Nirbhar Relief Package are only for the Residents; no relief has been announced for the Non-residents on TDS.

Section Nature of Payment TDS Rate
194B Income from lotteries, crossword puzzles, card games, etc. 30%
194BB Income from winning horse races 30%
194E Payment to non-resident sports association 20%
194G Commission on sale of lottery tickets 05%
194LB Interest on Infrastructure debt fund 05%
194LBA Income distributed by business trust to unit holders 05%
194LBC Income in respect of securitization of funds 40%
194LC Interest payment by indian company or business trust for loan availed in foreign currency. 05%
194LD Interest payment on bond of an Indian company or government security to a foreign investor 05%
195 Various other payments
a) Long term capital gain referred to in sub clause (iii) of clause © of sub section (1) of Section 112 10%
b) Short term capital gain referred in section 111A 15%
c) Any other long term capital gain not referred in clauses (33), (36), and (38) of section 10 20%
d) Income from interest payable by indian government or indian concern for loan availed in foreign currency, not covered in Section 194LB and 194LC 20%
e) Royalty income payable by Indian government or Indian concern (first and second proviso of subsection (1A) of section 115A 10%
196B Income from units including long term capital gain and transfer of units to offshore funds. 10%
196C Income from foreign currency bonds or GDR of Indian company 10%
196D Income of foreign institutional investors from securities 20%

Interest on Late TDS payment

The payment of TDS through challan is required to be made by the 7th of next month for the concerned month. In other words, if you have to pay the amount deducted by you as TDS in the month of April, then it must be done by 7th of May. Thus, in case the payment is not made by the due date then interest on the due amount charged on a monthly basis at the rate of 1.50% on the due amount.

FAQs

How is TDS calculated?

TDS is calculated based on the threshold limit and TDS rate specified by the Income Tax Department for a certain payment.

What is the TDS rate?

TDS rate is the percentage specified in the Income Tax Act on the basis of which tax needs to be deducted at source for certain specified payments.

What percentage of TDS is deducted?

The percentage of TDS deducted is specified separately for each type of payment which is covered under TDS.

What is the minimum amount for TDS deduction?

Not every payment has a minimum threshold limit. However, there are certain specified payments in which TDS has to be deducted if the total amount paid during the financial year exceeds the prescribed limit.

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