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Rate of TDS (Tax deducted at source)
In a simple language TDS stands for tax deducted at source. It is a tax that is deducted from the earning of the employee by the employer in other words it is a tax that is deducted at source. It is deducted as per the finance act of that year. TDS should not be confused with the income tax return; TDS is a different tax than income tax . Tax deduction is useful to reduce the income taxand provide tax relief. TDS is deposited in the government treasury and later on assigned to central government. TDS came into existence because government wants to expand their tax bracket in the country.
| Section | Nature of Payment | Threshold Limit of Payment | Individual /HUF | Others | |||||||
| 1 | 192 | Income from Salary |
|
Average rate of Tax + edu. Cess (no surcharge) | Not Applicable | ||||||
| 2 | 194A | Interest from a Banking Company | Rs. 10,000 per annum | 10% | 10% | ||||||
| 3 | 194A | Interest other than from a Banking Co. | Rs. 5,000 per annum | 10% | 10% | ||||||
| 4 | 194C | Payment to Contractors; Sub-contractor; Advertising Contractors |
|
1% | 2% | ||||||
| 5 | 194-I | Rent on Plant / Machinery | Rs. 1,80,000 per annum | 2% | 2% | ||||||
| 6 | 194-I | Rent Other then Plant / Machinery | Rs. 1,80,000 per annum | 10% | 10% | ||||||
| 7 | 194J | Fees for Professional / Technical Services | Rs. 30,000 per annum | 10% | 10% | ||||||
| 8 | 194B | Winning from Lotteries & Puzzles | Rs. 10,000 per annum | 30% | 30% | ||||||
| 9 | 194BB | Winning from Horse Races | Rs. 5,000 per annum | 30% | 30% | ||||||
| 10 | 194E | Non-resident Sportsman or Sports Association | -- | 10% | 10% | ||||||
| 11 | 194D | Insurance Commission | Rs.20,000 per annum | 10% | 10% | ||||||
| 12 | 194G | Commission on Sale of Lottery Tickets | Rs.1000 | 10% | 10% | ||||||
| 13 | 194H | Commission/Brokerage | Rs. 5,000 per annum | 10% | 10% | ||||||
| 14 | 206C | Scrap | -- | 1% | 1% | ||||||
| 15 | 206C | Tendu Leaves | -- | 5% | 5% | ||||||
| 16 | 206C | Timber obtained under a forest lease or other mode | -- | 2.50% | 2.50% | ||||||
| 17 | 206C | Any other forest produce not being a Timber or tendu leave | -- | 2.50% | 2.50% | ||||||
| 18 | 206C | Alcoholic Liquor for Human Consumption | -- | 1% | 1% | ||||||
| 19 | 206C | Packing lot, toll plaza, mining & quarrying | -- | 2% | 2% |
Notes
1. Surcharges & Education Cess
| Type of Payment | Surcharge (2.50%) | Education Cess (3.00%) |
| Salary | No | Yes |
| Other Payments to Residents | No | No |
| Other Payments to Foreign Co. (Payment exceeds 1 cr.) | Yes | Yes |
| Other Payments to Foreign Co. (Payment upto 1 cr.) | No | Yes |
| Payments to Other Non-residents (Irrespective of amount) | No | Yes |
2. Nil rate will be applicable to transporter of goods if he provides his PAN to the deductor.
3. Nil Deduction entries of transporters also to be shown in Form 26Q.v 4. TDS @ 20% where PAN not furnished.
TDS Rates for Non-Residents u/s 195 of Income Tax Act, 1961
| Nature of Payment | Co. | Others | |
| 1. | Long Term Capital Gains u/s 115E | NA | 10% |
| 2 | Other Long Term Capital Gains (excluding u/s 10(33), 10(36) & 10 (38)) | 20% | 20% |
| 3 | Short Term Capital Gains u/s. 111A | 15% | 15% |
| 4 | Investment income from Foreign Exchange Assets | NA | 20% |
| 5 | Interest payable on moneys borrowed or debt incurred in Foreign Currency | 20% | 20% |
| 6 | Royalty & Fees for technical services u/s. 115A - Agreement 1st June, 1997 to 31st May, 2005 - Agreement on or after 1st June 2005 |
20% 10% |
20% |
| 7 | Winnings from Lotteries, Crossword Puzzles and Horse Races | 30% | 30% |
| 8 | Any Other Income | 40% | 30% |
Notes :
1. Surcharge @ 2.50% is applicable only in case of Non-Domestic Companies where payments exceed Rs. 1 cr.
2. Education cess @ 3% is applicable in all cases.
Interest on delay in deposit of tax after deduction
| Stage of deduction |
Upto 30th June 2010 (Rate per month or part of the month) |
From 1st July 2010 (Rate per month or part of the month) |
| From date when deductible till actual deduction | 1% | 1% |
| From date of deduction till payment | 1% | 1.5% |
