The concept of TDS was introduced in income tax with an aim to collect tax from the very source of income. As per this concept, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and deposit the same with government.
A summary of nature of payments on which the payer needs to deduct TDS with applicable TDS rates are given in the below schedule:
| Particulars | TDS Rates (in %) |
|---|---|
| Where the person is resident in India- | Medical purposes |
| Section 192: Payment of salary | Normal Slab Rate |
| Section 192A: Payment of accumulated balance of provident fund which is taxable in the hands of an employee. | 10 |
| Section 193: Interest on securities a) 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; b) 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; c) any security of the Central or State Government; [i.e. 8% Savings (Taxable) Bonds, 2003 and 7.75% Saving (Taxable) Bonds, 2018] d) interest on any other security | 10 |
| Section 194: Income by way of dividend | 10 |
| Section 194A: Income by way of interest other than “Interest on securities” | 10 |
| Section 194B: Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort | 30 |
| Section 194BB: Income by way of winnings from horse races | 30 |
| Section 194C: Payment to contractor/sub-contractor a) HUF/Individuals b) Others | 1 2 |
| Section 194D: Insurance commission | 5 |
| Section 194DA: Payment in respect of life insurance policy | 5 |
| Section 194EE: Payment in respect of deposit under National Savings scheme | 10 |
| Section 194F: Payment on account of repurchase of unit by Mutual Fund or Unit Trust of India | 20 |
| Section 194G: Commission, etc., on sale of lottery tickets | 5 |
| Section 194H: Commission or brokerage | 5 |
| Section 194-I: Rent a) Plant & Machinery b) Land or building or furniture or fitting | 2 10 |
| Section 194-IA: Payment on transfer of certain immovable property other than agricultural land | 1 |
| Section 194-IB: Payment of rent by individual or HUF not liable to tax audit | 5 |
| Section 194-IC: Payment of monetary consideration under Joint Development Agreements | 10 |
| Section 194J: Fees for professional or technical services: i) sum paid or payable towards fees for technical services ii) sum paid or payable towards royalty in the nature of consideration for sale, distribution or exhibition of cinematographic films; iii) in case of a payee engaged only in the business of operation of a call centre iv) Any other sum | 2
10 |
| Section 194K: Income in respect of units payable to resident person | 10 |
| Section 194LA: Payment of compensation on acquisition of certain immovable property | 10 |
| Section 194LBA(1): Business trust shall deduct tax while distributing, any interest received or receivable by it from a SPV or any income received from renting or leasing or letting out any real estate asset owned directly by it, to its unit holders. | 10 |
| Section 194LBB: Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)] | 10 |
| Section 194LBC: Income in respect of investment made in a securitisation trust (specified in Explanation of section 115TCA) | 25 in case of Individual or HUF
—————————————— 30 in case of any other person |
| Section 194M: Payment of commission (not being insurance commission), brokerage, contractual fee, professional fee to a resident person by an Individual or a HUF who are not liable to deduct TDS under section 194C, 194H, or 194J (when aggregate of sum credited or paid during a financial year exceeds Rs. 50 lakh) | 5 |
| Section 194N: Cash withdrawal during the previous year from one or more account maintained by a person with a banking company, co-operative society engaged in business of banking or a post office: i) in excess of Rs. 1 crore ii) in excess of Rs. 20 lakhs For those persons who have not filed return of income (ITR) for three previous years immediately preceding the previous year in which cash is withdrawn, and the due date for filing ITR under section 139(1) has expired. The deduction of tax under this situation shall be at the rate of: a) 2% from the amount withdrawn in cash if the aggregate of the amount of withdrawal exceeds Rs. 20 lakhs during the previous year; or b) 5% from the amount withdrawn in cash if the aggregate of the amount of withdrawal exceeds Rs. 1 crore during the previous year. | 2 2% /5% |
| Section 194-O: Payment or credit of amount by the e-commerce operator to e-commerce participant | 1 |
| Section 194P: Deduction of tax by specified bank in case of senior citizen having age of 75 or more | Tax on total income as per rate in force |
| Section 194Q: Payment for purchase of goods of the aggregate value exceeding Rs. 50 lakhs | 0.1 |
| Section 194R: Deduction of tax in case any benefit or perquisite is provided and aggregate value of such benefit/perquisite arising from business/profession exceeds Rs. 20,000 | 10 |
| Section 194S: Payment on transfer of Virtual Digital Asset Note: No tax shall be deducted under this provision in the following circumstance: • If the consideration is payable by any person (other than a specified person) and its aggregate value does not exceed Rs. 10,000 during the financial year. • if the consideration is payable by a specified person and its aggregate value does not exceed Rs. 50,000 during the financial year. Specified person means: (a) An individual or a HUF, whose total sales, gross receipts or turnover does not exceed Rs. 1 crore in case of business or Rs. 50 lakhs in case of a profession, during the financial year immediately preceding the financial year in which virtual digital asset is transferred; (b) An individual or a HUF who does not have any income under the head profits and gains of business or profession. | 1 |
| Any Other Income | 10 |
| where the person is not resident in India (TDS rate to be increased by HEC and surcharge as applicable)- | |
| Section 192: Payment of Salary | Normal Slab Rate |
| Section 192A: Payment of accumulated balance of provident fund which is taxable in the hands of an employee. | 10 |
| Section 194B: Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort | 30 |
| Section 194BB: Income by way of winnings from horse races | 30 |
| Section 194E: Payment to non-resident sportsmen/sports association | 20 |
| Section 194EE: Payment in respect of deposits under National Savings Scheme | 10 |
| Section 194F:Payment on account of repurchase of unit by Mutual Fund or Unit Trust of India | 20 |
| Section 194G: Commission, etc., on sale of lottery tickets | 5 |
| Section 194LB: Payment of interest on infrastructure debt fund | 5 |
| Sec. 194LBA(2): Payment of the nature referred to in Section 10(23FC)(a) | 5 |
| Section 194LBA(2): Payment of the nature referred to in Section 10(23FC)(b) | 10 |
| Section 194LBA(3): Payment of the nature referred to in section 10(23FCA) by business trust to unit holders | 30 |
| Section 194LBB: Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)]. | 30 |
| Section 194LBC: Income in respect of investment made in a securitisation trust (specified in Explanation of section115TCA) | 30 |
| Section 194LC: Payment of interest by an Indian Company or a business trust in respect of money borrowed in foreign currency under a loan agreement or by way of issue of long-term bonds (including long-term infrastructure bond) | 5 or 4 ( In case of IFSC) |
| Section 194LD: Payment of interest on rupee denominated bond of an Indian Company or Government securities to a Foreign Institutional Investor or a Qualified Foreign Investor | 5 |
| Section 195: Payment of any other sum to a Non-resident
a) Income in respect of investment made by a Non-resident Indian Citizen b) Income by way of long-term capital gains referred to in Section 115E in case of a Non-resident Indian Citizen c) Income by way of long-term capital gains referred to in sub-clause (iii) of clause (c) of sub-Section (1) of Section 112 d) Income by way of long-term capital gains as referred to in Section 112A e) Income by way of short-term capital gains referred to in Section 111A f) Any other income by way of long-term capital gains [not being long-term capital gains referred to in clauses 10(33), 10(36) and 112A g) Income by way of interest payable by Government or an Indian concern on moneys borrowed or debt incurred by Government or the Indian concern in foreign currency (not being income by way of interest referred to in Section 194LB or Section 194LC) h) Income by way of royalty payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern where such royalty is in consideration for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book on a subject referred to in the first proviso to sub-section (1A) of Section 115A of the Income-tax Act, to the Indian concern, or in respect of any computer software referred to in the second proviso to sub-section (1A) of Section 115A of the Income-tax Act, to a person resident in India i) Income by way of royalty [not being royalty of the nature referred to point h) above] payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy j) Income by way of fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy k) Any other income | 20
10 10 10 15 20 20 10 10 10 30 |
| Section 196B: Income from units (including long-term capital gain on transfer of such units) to an offshore fund | 10 |
| Section 196C: Income from foreign currency bonds or GDR of an Indian company (including long-term capital gain on transfer of such bonds or GDR) | 10 |
| Section 196D: Income of foreign Institutional Investors from securities (not being dividend or capital gain arising from such securities) Note: Tax shall be deducted at the rate provided under DTAA if same is lower than the existing TDS rate | 20 |
Other TDS forms
Form 26QB- TDS on sale of property- Tax to be deposited and return to be filed 30 days from the end of the month in which TDS is deducted
Form 26QC- TDS on rent- Tax to be deposited and return to be filed 30 days from the end of the month in which TDS is deducted
Filing income tax returns
Chapter VIA deductions
Capital gains taxation
Taxation of business
NRI income
GST returns and due dates
Input tax credit claim
GST Refund
GST TCS
GST TDS
Tax Collected at Source