TDS ON RESIDENT PAYMENTS

Particulars

Individual

/ HUF

Domestic company/

firm/Trust

Criteria for Deduction

Nature of payments

Sec. Code

Rate in %

Rate in %

Payment in Excess of

1

Salary

192

As per the prescribed rates applicable to individual & senior citizens

2

Payment of accumulated balance of provident fund which is taxable in the hands of an employee.

192A

   10%                         

-

Rs. 50,000

3

Interest on securities

193

     10%

        -

Rs. 2,500

 4

Dividend

194

10%

10%

Monetary Limit – Rs 5,000/-

Shall not apply to dividend paid to a business trust by a special purpose vehicle or to any other person as may be notified

5

Interest other than interest on securities

194A

10%

10%

• Bank/Co-operative Society/Post office Interest -Rs.40,000/-p.a (Senior Citizen Rs.50,000/- p.a)
• Other Payers -Rs.5,000/- p.a

6

Winnings from cross word puzzles, lotteries, card games ,other games of any sort

194B

    30%

-

Rs. 10,000/-

7

Winnings from horse races

194BB

    30%

-

Rs. 10,000/-

8

Payment to Contractors

194C

1%

2%

Rs. 30,000/- per contract (or)  Rs. 1,00,000/- p.a

9

Payment to contact transporters not covered 44AE

194C

1%

    2%

Rs. 30,000/- per contract (or)  Rs. 75,000/- p.a

10

Insurance commission

194D

5%

   10%

15,000/- p.a

11

Commission & Brokerage

194H

5%

5%

Rs. 15,000/- p.a.

12

a. Rent - Plant & Machinery

194I(a)

194I(b)

2%

2%

Rs. 2,40,000/- p.a.

b. Rent - Land & Building

    10%

10%

13

Payment for Fees for technical services Professional service or Royalty

194J

Rs. 30,000/- p.a.

1. Fees for technical service
2. call center 2%  (w.e.f. 01.07.2017)

2%

2%

a. Fee  in all other cases

b. Royalty consideration for sales, distribution or exhibition of cinematographic films

 10%

10%

14

Sale of Immovable Property

other than Agricultural Land

194IA

1%

1%

Above Rs. 50,00,000/- per transaction

15

Payment of Rent By individuals /HUFs

194IB

5%

        -

Rs.50,000 per month

  16

Payment of monetary

consideration under Joint

Development Agreements

194IC

10%

10%

-

  17

a. Cash withdrawal during the year from one or more account maintained with a bank, co-operative society engaged in business of banking or a post office

194N

2%

       2%

Cash withdrawal in excess of Rs. 1 crore 

b. Cash withdrawal Cash by any person has not filed return of income for 3 previous years as per  Sec 139(1) from bank, co-operative society

194N

2%

    2%

Cash withdrawal in excess of Rs. 20 Lakhs upto Rs. 1 crore.

5%

5%

Cash withdrawal Above 1 Crore

  18

Applicable for E-Commerce operator for sale of goods or provision of service facilitated by it through its digital or electronic facility or platform.

194-O

1%

1%

In Excess of Rs.5,00,000/-

  19

Purchase of goods

(This section is applicable for the person whose turnover exceeds 10 crores during preceding FY)

 Not  applicable to

1. transaction on which any other TDS sec applicable (or)

   2. Other than TCS sec 206C(1h)  applicable transactions

   (applicable w.e.f 01-07-2021)

  (Refer Table Below)

194Q

  0.1%

(If No PAN – 5%)

0.1%

(If No PAN – 5%)

If aggregate purchase from single vendor > 50 lakh in the previous year.  

Comparison of 194Q (TDS) & 206C(1H) (TCS) with Example –w.e.f - 01.07.2021

Applicability of Sec 206C(1H) Form 1st July 2021 –

• Sec 206C(1H) will apply based on applicability of Sec. 194Q (TDS deduction on purchase of goods) from 1st July 2021
• Second Proviso to Section 206C(1H) provides that if the buyer is liable to deduct tax under Sec 194Q on the goods purchased by him from the seller and has deducted such amount, no TCS on the same transaction. Section 194Q(5) provides that no tax is required to be deducted by a person under this provision if tax is deductible under any other provision or tax is collectable under section 206C [other than a transaction on which tax is collectable under Section 206C(1H)].
• Though Section 206C(1H) excludes a transaction on which tax is actually deducted under any other provision (which will cover Section 194Q as well), but Section 194Q(5) does not create a similar exception for a transaction on which tax is collectible under Section 206C(1H). Thus, the buyer shall have the primary and foremost obligation to deduct the tax and no tax shall be collected on such transaction under Section 206C(1H). However, if the buyer makes a default, the liability to collect the tax gets shifted to the seller.

Applicability of Sec 194Q : W.E.F 1st July 2021 -

• The total sales, gross receipts or turnover of the buyer from the business should exceed Rs. 10 crores during the financial year immediately preceding the financial year in which such goods are purchased.
• If the value of purchase exceeds Rs. 50 lakhs.
• Tax is required to be deducted at the time of credit of such sum to the account of the seller or at the time of payment thereof by any mode, whichever is earlier.

Example of Applicability of Section 194Q & 206C(1H)

Sec.

Particulars

TCS Rates (in %)

206C

(1)

Sale of the following:

a) Alcoholic Liquor for Human Consumption

1%

b) Tendu leaves

5%

c) Timber obtained under a forest lease

2.50%

d) Timber obtained by any mode other than under a forest lease

2.50%

e) Any other forest produce not being timber or tendu leaves

2.50%

f) Scrap

1%

g) Minerals, being coal or lignite or iron ore

1%

206C(1C)

Grant of lease or license of the following:

a) Parking lot

2%

b) Toll Plaza

2%

c) Mining and quarrying (Other than mining and quarrying of mineral oil, petroleum and natural gas)

2%

206C(1F)

Sale of Car value more than 10 Lakhs

1%

206C(1G)

(a)

@-All outward remittances done under Liberalised Remittance Scheme (LRS)

5 %  (subject to a threshold limit exceeds of INR 7 Lakhs per year)

206C(1G)(b)

@-TCS on selling of overseas tour package

5 % 

206C(1H)

@-selling goods other than those already covered under TCS provisions

(Not applicable business turnover is less than INR 10 Crore in the preceding financial year)

Form 01.07.2021 If Section 194Q applies then this section will not applicable for that transaction.

(Also Refer Table above)

0.1% of the goods sold exceeding INR 50 Lakhs in previous year

(In non-PAN/Aadhaar cases the rate shall be 5%)