CA Pratibha Goyal | May 13, 2020 |
TDS/TCS Rates revised, applicable from 14-05-2020
In the press conference held on May 13, 2020 the Finance Minister, Smt. Nirmala Sitharaman, announced that the TDS/TCS Rates revised in respect of specified payments/receipts shall be reduced by 25%. This concession in the rate shall be available for the tax deducted or collected between 14-05-2020 till 31-03-2021. This relief shall not be available to a salaried and non-resident taxpayer.
The provisions, under which the concessional rates of TDS/TCS shall be available, will be known when an Ordinance is promulgated in this regard. As the reduced rates shall come in force from tomorrow, that is, 14-05-2020, we have enumerated the tentative rates of TDS/TCS in the below table.
Income Tax Rate For One Person Company FY 2020-21
| Section | Nature of Income | Rate of TDS applicable for the period | Threshold Limit for deduction tax | |
| 01-04-2020 to 13-05-2020 | 14-05-2020 to 31-03-2021 | |||
| 193 | Interest on Securities | 10% | 7.50% | 0 |
| 194 | Dividend | 10% | 7.50% | Rs. 5,000 in case of Individual |
| 194A | Interest other than interest on Securities | 10% | 7.50% | Rs. 5,000 to Rs. 50,000 |
| 194C | Payment to Contractors | 1%: If deductee is an individual or HUF | 0.75%: If deductee is an individual or HUF | Single payment : Rs. 30,000 |
| 2%: In any other case | 1.50%: In any other case | Aggregate payment: Rs. 100,000 | ||
| 194D | Insurance Commission | 10%: If deductee is domestic Company | 7.50%: If deductee is domestic Company | 15,000 |
| 5%: In any other case | 3.75%: In any other case | |||
| 194G | Commission and other payments on sale of lottery tickets | 5% | 3.75% | 15,000 |
| 194H | Commission and Brokerage | 5% | 3.75% | 15,000 |
| 194-I | Rent | 10%: If rent pertains to hiring of immovable property | 7.50%: If rent pertains to hiring of immovable property | 2,40,000 |
| 2%: If rent pertains to hiring of plant and machinery | 1.50%: If rent pertains to hiring of plant and machinery | |||
| 194-IB | Payment of Rent by Certain Individuals or HUF | 5% | 3.75% | 50,000 |
| 194J | Royalty and Fees for Professional or Technical Services | 2%: If royalty is payable towards sale, distribution or exhibition of cinematographic films | 1.50%: If royalty is payable towards sale, distribution or exhibition of cinematographic films | Director’s fees: Nil |
| 2%: If recipient is engaged in business of operation of call Centre | 1.50%: If recipient is engaged in business of operation of call Centre | Others: Rs. 30,000 | ||
| 2%: If sum is payable towards fees for technical services (other than professional services) | 1.50%: If sum is payable towards fees for technical services (other than professional services) | |||
| 10%: In all other cases | 7.50%: In all other cases | |||
| 194M | Payment to contractor, commission agent, broker or professional by certain Individuals or HUF | 5% | 3.75% | 50 lakhs |
| 194N | Cash withdrawal | 2%: In general if cash withdrawn exceeds Rs. 1 crore | 1.50%: In general if cash withdrawn exceeds Rs. 1 crore | If a person defaults in filing of return: 20 lakhs If no default is made in filing of return: Rs 1 crore |
| 2%: If assessee has not furnished return for last 3 assessment years and cash withdrawn exceeds Rs. 20 lakhs but does not exceed Rs. 1 crore | 1.50%: If assessee has not furnished return for last 3 assessment years and cash withdrawn exceeds Rs. 20 lakhs but does not exceed Rs. 1 crore | |||
| 5%: If assessee has not furnished return for last 3 assessment years and cash withdrawn exceeds Rs. 1 crore | 3.75%: If assessee has not furnished return for last 3 assessment years and cash withdrawn exceeds Rs. 1 crore | |||
TDS/TCS Rates revised, applicable from 14-05-2020
FAQs on Computation of Tax with examples and illustrations
| Section | Goods & Services liable to TCS | Rate of TDS applicable for the period | |
| 14-05-2020 to 31-03-2021 | 14-05-2020 – 31-03-2021 | ||
| Section 206C(1) | Alcoholic liquor for human consumption | 1% | 0.75% |
| Section 206C(1) | Timber obtained under Forest lease Timber obtained by any mode other than under a forest lease Any other forest produce not being timber or tendu leaves | 2.50% | 1.88% |
| Section 206C(1) | Tendu leaves | 5% | 3.75% |
| Section 206C(1) | Minerals, being coal or ignite or iron ore | 1% | 0.75% |
| Section 206C(1) | Scrap | 1% | 0.75% |
| Section 206C(1C) | Parking Lot | 2% | 1.50% |
| Section 206C(1C) | Toll Plaza | 2% | 1.50% |
| Section 206C(1C) | Mining & quarrying | 2% | 1.50% |
Note: It should be noted the rate of TDS/TCS shall be the same in the following situations:
a) Where tax is deductible from salary or provident fund under Section 192 or Section 192A respectively
b) Where tax is deductible from any sum not being in the nature of payment for a contract, professional fees, interest, rent, dividend, commission, or brokerage. Thus, no concession in the rate of TDS from the sum payable in the nature of lottery income, consideration for the purchase of immovable property, etc.
How to compute Income Tax | FAQs on Computation of Tax
c) Where the sum is paid or payable to a non-resident person
d) Where a resident person does not furnish his PAN or Aadhaar and the tax is deductible at a higher rate under Section 206AA or Section 206CC, as the case may be.
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