The finance minister Nirmala Sitharaman in her recent press briefing has announced concessional TDS/TCS rates which will come into effect from May 14, 2020, for the remaining period of Financial Year 2020-21 i.e. from 14th May 2020 to 31st March 2021.
The Government on 13th May 2020 has announced various relief measures for the common man so that we can fight against the financial distress caused by COVID-19.
One among many relief is the reduction in the tax rates by 25% under TDS – Tax deducted at source.
Concessional TDS Rates applicable from 14th May 2020 to 31st March 2021.
|Nature of Payment||Relevant|
|TDS effective rate till 13th May 2020||TDS effective rate from 14th May 2020|
|TDS from withdrawal from employees provident fund scheme||192A||10%||10%|
|Interest on securities||193||10%||7.5%|
|Deduction of tax at source from dividends||194||10%||7.5%|
|Interest other than interest on securities||194A||10%||7.5%|
|Winnings from lotteries or crossword puzzles||194B||30%||30%|
|Winning from horse races||194BB||30%||30%|
|TDS on contractors and sub-contractors||194C||1% (In case of Individual/ HUF)|
2% (In other cases)
|0.75% (In case of Individual/ HUF)|
1.5% (In other cases)
|Payment of life insurance policy in excess of Rs.1Lakh other than exempted under section 10(10D)||194DA||5%||3.75%|
|Payments on account of re-purchase of Units by Mutual Funds or UTI||194F||20%||15%|
|Commission, prize etc., on sale of lottery tickets||194G||5%||3.75%|
|TDS on commission or brokerage in excess of Rs.15,000/-||194H||5%||3.75%|
|Rent for plant and Machinery||194-I(a)||2%||1.5%|
|Rent for immovable property||194-I(b)||10%||7.5%|
|Payment on transfer of certain immovable properties (other than agricultural land)||194-IA||1%||0.75%|
|Payment of rent of property by certain individuals/HUFs||194-IB||5%||3.75%|
|Payment for Joint Development Agreements||194-IC||10%||7.5%|
|In respect of income from units of Mutual funds||194K||10%||7.5%|
|In respect of payment made to professional or commission or brokerage of more than Rs.50,00,000/- and above||194M||5%||3.75%|
|In case of cash withdrawal exceeding Rs. 20 Lakh or Rs.1 Crore as the case may be||194N||2%||2%|
|Fees for professional fees etc||194J||(a) 2% in case of (FTS, certain royalties, call centre)|
(b) 10% in other cases
|(a) 1.5% in case (FTS, certain royalties, call centre)|
(b) 7.5% in other cases
|Payments in respect of deposits under National savings scheme||194EE||10%||7.5%|
|Payment of income by the Business trust||194LBA(1)||10%||7.5%|
|Payment of income by Investment fund||194LBB(i)||10%||7.5%|
|Income by the securitization trust||194LBC(1)||(a) 25% (Individual/HUF)|
(b) 30% (Others)
|(a) 18.75% (Individual/HUF)|
(b) 22.5% (Others)
|TDS on e-commerce participants||194-O||1% (which is going to be effective from 1st October 2020)||0.75%|
Points to remember:-
- This relief is not available under TDS if section 206AA is applicable i.e. if the deductee has not furnished its PAN/Aadhaar. In that case, the TDS rate will be applicable as per Section 206AA i.e. at the rate of 20% and not on 15%.
- This relief is provided only for the remaining period of financial year 2020-21 i.e. till 31st march 2021
You can refer our video for New TDS rates
“Subscribe” to our blogs for latest updates on Tax deducted at Source.
CA Devesh Thakur