In the day to day operations of the business, it is essential to have grip on Tax Deducted at Source (TDS) which acts as a means to collect tax at the inception of the income itself and Tax Collected at Source (TCS) where a seller collects a certain amount of tax from the buyer at the time of sale. In this webinar we will be learning the applicability, non-applicability, prevailing rate of tax and other related provisions of the Income-tax Act with respect to TDS and TCS
3. Legends used in the Presentation
AOP Association of Persons
BOI Body of Individuals
CBDT Central Board of Direct Taxes
CG Central Government
EDA Estate Duty Act
EPF Employees Provident Fund
GIC General Insurance Corporation
GTA Gift Tax Act
HUF Hindu undivided family
IRS Indian Revenue Service
ITA Income Tax Act, 1961
LIC Life Insurance Corporation
PAN Permanent Account Number
PY Previous Year
RPF Recognized Provident Fund
SG State Government
TAN Tax deduction Account Number
TCS Tax Collected at Source
TDS Tax Deducted at Source
UTI Unit Trust of India
WTA Wealth Tax Act, 1957
4. Sections Covered
Sec Particulars
192 Salary
192A Payment of accumulated balance due to an employee
193 Interest on securities
194A Interest other than Interest on securities
194B Winnings from lottery or crossword puzzle
194BB Winnings from horse race
194C Payments to contractors
194D Insurance commission
194DA Payment in respect of life insurance policy
194E
Payments to non-resident sportsmen or sports
associations
194EE
Payments in respect of deposits under National Savings
Scheme, etc
194F
Payments on account of repurchase of units by Mutual
Fund or Unit Trust of India
194G Commission, etc., on the sale of lottery tickets
194H Commission or brokerage
Secs Particulars
194I Rent
194IA
Payment on transfer of certain immovable property
other than agricultural land
194IB Payment of rent by certain individuals or HUF
194IC Payment under specified agreement
194J Fees for professional or technical services
194LA
Payment of compensation on acquisition of certain
immovable property
194LB Income by way of interest from infrastructure debt fund
194LBA Certain income from units of a business trust
194LBB Income in respect of units of investment fund
194LBC Income in respect of investment in securitization trust
194LC Income by way of interest from Indian company
194LD
Income by way of interest on certain bonds and
Government securities
194M Payment of certain sums by certain individuals or HUF
194N Payment of certain amounts in cash
206C Collection at Source
5. Introduction
Mode of collecting income tax
Controlled by CBDT
Combines the concept of pay as you earn and collect as it is earned
Acts as a tool to collect tax in order to minimise tax evasion
Reduces the burden of paying taxes as a lumpsum
Steady inflow of revenue to Government
6. Manner of deduction
Salary – Sec 192
Applicability
Every person responsible for paying any income chargeable to tax under
the head ‘Salaries’ to deduct income tax on the amount payable
For purposes of deduction of tax out of salaries payable in a foreign currency, the value of salaries in
terms of rupees should be calculated at the telegraphic transfer buying rate on date of deduction
In respect of salary payments to employees of Government or to employees of companies, co-operative
societies, local authorities, universities, institutions, associations or bodies, deduction of tax at source
should be made after allowing relief under Sec 89 (arrears or advance of salary), where eligible
Where an assessee has income from sources other than ‘Salary’ such income shall be disclosed to the
deductor and TDS shall be deducted accordingly
Rate of TDS • Such income-tax has to be calculated at the average rate of income-tax
• Average rate means the rate arrived at by dividing the amount of income-tax by the total income
Other Conditions
• Payment of tax on non-monetary perquisites - the employer may pay this tax,
at his option, in lieu of deduction of tax at source at the average rate applicable
7. Payment of Accumulated Balance Due to an Employee - Sec 192A
Applicability
• Taxable premature withdrawal from EPF scheme
• Trustees of the EPF scheme or any person authorised to make
payment of accumulated balance due to employees
Time of Deduction Time of payment of accumulated balance due to the employee
Non-applicability Amount or aggregate amount of such payment is less than Rs. 50,000
Requirement of
Furnishing PAN
• Any person entitled to receive any amount has to furnish his PAN to the
person responsible for deducting such tax
• On Failure, Deduction shall be made maximum marginal rate
Rate of TDS 10%
Maximum Marginal Rate means the rate of income-tax (including surcharge on income-tax, if any) applicable in relation to the
highest slab of income in the case of an individual, AOP or, BOI as specified in the Finance Act of the relevant year
8. Interest on Securities - Sec 193
Applicability Every person responsible for paying to a resident any income by way of interest on securities
Rate of TDS At the rates in force – which is 10%
Time of deduction • At the time of credit of such income to the account of payee (includes credit to suspense or payable account)
or
• At the time of payment by way of cash or by issue of a cheque draft or by any other mode
whichever is earlier
Any interest payable on 4 % National Defence Bonds, 1972, where the bonds are held by an individual, not being a non-resident; or
Any interest payable on National Development Bonds; or
Any interest payable on 7-Year National Savings Certificates (IV Issue); or
Any interest on debentures, issued by any institution or authority, or public sector company, or co-operative society, as notified by CG
Any interest payable to the LIC
Any interest payable to the General Insurance Corporation
Any interest payable to any other insurer in respect of any securities owned by it or in which it has full beneficial interest;
Non- applicability
Rate of TDS
9. Securities
Shares, scrips, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature in or of any
incorporated company or other body corporate
Derivative
Units or any other instrument issued by any collective investment scheme to the investors in such schemes
Receipt or other security, issued by a securitisation company or reconstruction company to any qualified institutional buyer
pursuant to a scheme, evidencing the purchase or acquisition by the holder thereof, of an undivided right, title or interest in the
financial asset involved in securitisation
Units or any other such instrument issued to the investors under any mutual fund scheme
Government securities
Such other instruments as may be declared by the Central Government to be securities and
Rights or interest in securities
Securities shall include: —
10. Interest other than Interest on Securities - Sec 194A
Applicability • Interest other than interest on securities paid to Residents
• By Individuals and HUF subject to Tax Audit in the previous FY
• And Other Assessees
Time of deduction • At the time of crediting such interest to the payee or
• At the time of its payment in cash or by any other mode,
whichever is earlier
At the rates in force – which is 10%Rate of TDS
Non-applicability No deduction shall be made:
If the aggregate amount of interest paid or credited during the FY does not exceed Rs. 5,000
However, the limit will be Rs. 40,000 in respect of interest paid on :
Time deposits with a
banking company
Time deposits with a co-operative society
engaged in banking business
Deposits with post office under
notified schemes
The limit Rs. 40,000 is increased to Rs. 50,000 in case of payee being a resident senior citizen
11. By a firm to any of its partners
By a co-operative society to a member or to any other co-operative society
By way of deposits under any scheme framed by the CG
By way of deposits (other than time deposits) with:
Deposits with primary agricultural credit society or a primary credit society or a co-operative land
mortgage bank or a co-operative land development bank
By the CG under any provisions of Income-tax Act
A bank to which the Banking
Regulation Act, 1949 applies:
or
A co-operative society
engaged in carrying on the
business of banking
Interest credited or paid:
Interest paid or credited to the following entities:
Banking companies or co-operative societies engaged in the business of banking
Financial corporations under Central, State or Provincial Act
LIC, UTI, Insurance business carried by companies and co-operative societies
Contd. – Non Applicability
Notified institution, association, body by CG
12. Winnings from Lottery or Crossword Puzzle - Sec 194B
Any income arising by way of winnings from lotteries, crossword puzzles, card
game and other game of any sort other than horse races
Rate of TDS 30%
Responsibility to deduct TDS Every person responsible for paying to any person
Resident or Non-resident
Any income which falls under this Sec is required to deduct income tax, if the amount of payment exceeds Rs. 10,000
Where winnings are partly paid in cash and partly in kind
• Where the winnings are wholly in kind or partly in cash and partly in kind
• but the part in cash is not sufficient to meet the tax liability of deduction of tax
• Then the person responsible for paying shall, before releasing the winnings,
• Shall ensure that tax has been paid
Applicability
13. Rate of TDS
Any income arising by of winnings from horse race
30%
Responsibility to deduct TDS
The following person shall be responsible for deducting TDS
Bookmaker
A person to whom license has been
granted by government
For horse racing in any
race course
For arranging for wagering (to risk
money by guessing the result of
something) or betting in any race
courseThreshold limit
The obligation to deduct TDS when winnings from any horse race is in excess of Rs. 10,000
Winnings from Horse Race – Sec 194 BB
Applicability
A bookmaker is an organization or a person that accepts and pays off bets on sporting and other events at agreed-upon odds
14. Applicability Any person responsible for paying any sum to any resident for carrying out any work in
pursuance of a contract between the contractor and specified person
Specified person CG or SG or local authority, any government of foreign state or a foreign enterprise
Any company, co-operative society, trust, firm, and
Any person being an individual or HUF or AOP subject to tax audit in the immediately preceding FY
Time of Deduction • At the time of payment of such sum or
• at the time of credit of such sum to the account of contractor,
whichever is earlier
Payments to Contractors – Sec 194 C
Payee TDS rate
Individual/ HUF 1%
Other than Individual/ HUF 2%
Contractor in transport business (if PAN is furnished) Nil
Sub-contractor in transport business (if PAN is
furnished) Nil
Rate of TDS
15. Work includes:
Advertising, broadcasting and telecasting, carriage of goods or passengers by any mode of transport other than by railways
Catering, manufacturing or supplying a product according to the specifications of customer by using customer's material
Contd.
Non- Applicability
No deduction is required during the course of business of plying, hiring or leasing goods carriages if PAN is
furnished to deductor
No tax has to be deducted at source in respect of payments made by individuals/ HUF to a contractor
exclusively for personal purposes
Threshold limit Tax has to be deducted at source where the amount credited or paid exceeds
Rs. 30,000 in single payment or Rs. 1,00,000 in aggregate during the FY
16. Applicability any person responsible for paying to a resident any income by way of remuneration or reward, by commission
or otherwise, for soliciting or procuring Insurance business
Rate of TDS 5%
Tax to be deducted if such income or aggregate of amounts of such income exceeds Rs. 15,000 during the FY
Insurance Commission – Sec 194 D
• At the time of the credit of the income to the account of the payee or
• at the time of making the payment to the payee,
whichever is earlier.
Time of Deduction
Threshold limit
Payment in respect of Life Insurance Policy – Sec 194DA
Applicability Sum received under a life insurance policy which is not exempt under Sec 10(10D)
Rate of TDS Deduction is made at the rate of 1% on any sum paid to a resident.
However, with effect from 01-09-2019 tax is to be deducted at the rate of 5%
Threshold limit If the payment or aggregate payments in a FY to an assessee is Rs. 1,00,000 or more
17. Sec 10(10D)
Any sum received under a life insurance policy, including the sum allocated by
way of bonus on such policy is exempt from tax, except the following
Any sum received under a policy where the dependent of the assessee (who has claimed
80DD or 80DDA deduction predeceases and the assessee receives the sum assured
Any sum received under a Keyman insurance policy
Any sum received under an insurance policy n respect of which the premium payable for any
of the years during the term of the policy exceeds 10% of the actual capital sum assured
The limit shall be 15% in case of policy taken for person with disability or disease or ailment
(Sec 80U or 80DDB)
18. • Any income referred to in Sec 115BBA (Game Fee, Advertisement, Contribution to Articles, any winnings etc. )
• Payable to a non-resident sportsman (including an athlete) or an entertainer who is not a citizen of India or a
non-resident sports association or institution.
Applicability
Rate of TDS 20%
Deduction should be made at the time of credit of such income to the account of the payee or at the time
of payment, whichever is earlier
Time of deduction
Mode of payment can be in cash or by issue of a cheque or draft or by any other mode
Payments to Non-resident Sportsmen or Sports Association –
Sec 194 E
Rate of TDS At the rate of 10% at the time of payment
No such deduction shall be made where the amount of payment or the
aggregate amount of payments in a FY is less than Rs. 2,500
Non-applicability Payments made to the heirs of the assessee shall not attract TDS under this Sec
Payments in Respect of Deposits under National Savings
Scheme etc. - Sec 194EE
Person responsible for paying to any person any amount from National Savings Scheme AccountApplicability
Threshold limit
19. Commission etc. on the Sale of Lottery Tickets - Sec 194G
Applicability
Time of deduction Deduction should be made at the time of credit of such income to the account of the payee or at the time
of payment, whichever is earlier
Mode of payment can be in cash or by issue of a cheque or draft or by any other mode
Person responsible for paying to any person, who is or has been stocking, distributing, purchasing or
selling lottery tickets, any income by way of commission, remuneration or prize on lottery tickets
Rate of TDS
Threshold limit Amount exceeding Rs. 15,000
5%
20% at the time of payment of such amount
Repurchase of units by Mutual Fund or Unit Trust of India – Sec 194F
A person responsible for paying to any person any amount on account of
repurchase of units covered under Equity Linked Savings Scheme (Sec 80CCB)
Applicability
Rate of TDS
20. Applicability
and Rate of TDS
Any person who is responsible for paying any income by way of commission (other than insurance
commission) or brokerage to a resident shall deduct income tax at the rate of 5%
However, an individual or HUF not subject to Tax Audit preceding FY is not liable to deduct TDS
Time of deduction Such deduction should be made at the time of credit of such income to the account of the payee
or at the time of payment of such income, whichever is earlier.
Mode of payment may be by cash, cheque, draft or any other mode
Threshold limit No deduction is required if the amount of such income or the aggregate of such amount
does not exceed Rs. 15,000 during the FY
Commission or Brokerage - Sec 194H
Meaning of Commission or brokerage
any payment received or receivable, directly or indirectly, by a person acting on behalf of another person
• for services rendered,
• or for any services in the course of buying or selling of goods,
• or in relation to any transaction relating to any asset, valuable article or thing, other than securities.
Non- Applicability This Sec is not applicable to professional services (which is covered under Sec 194J)
Commission or brokerage includes:
21. Applicability and Rate of TDS Any person who is responsible for paying to a resident any
income by way of rent shall deduct income tax at the rate of:
2% in respect of rent for plant, machinery or equipment 10% in respect of other rental payments
Rent - Sec 194I
However, an individual or HUF not subject to Tax Audit preceding FY is not liable to deduct TDS
Threshold limit No deduction need be made where the amount of such income or the
aggregate of the amounts does not exceed Rs. 2,40,000
Meaning of Rent
Rent means any payment, by whatever name called, under any lease, sub-lease, tenancy or any-
Land Building Land appurtenant to a building Machinery Plant Equipment Furniture Fittings
Time of deduction Such deduction should be made at the time of credit of such income to the account of the payee
or at the time of payment of such income, whichever is earlier.
Mode of payment may be by cash, cheque, draft or any other mode
22. Applicability and Rate of TDS Every transferee responsible for paying any sum as consideration for transfer of
immovable property to a resident shall deduct tax, at the rate of 1% of such sum
Time of deduction Such deduction should be made at the time of credit of such sum to the account of the
resident transferor or at the time of payment of such sum, whichever is earlier.
Threshold limit No deduction required where the total amount of consideration is less than Rs. 50 lakhs
Non- applicability Compulsory acquisition of immovable property not covered under this Sec (Sec 194LA will apply)
Payment on Transfer of Certain Immovable Property
other than Agricultural Land - Sec 194IA
Non-applicability of TAN Requirement of obtaining TAN shall not apply to the person required to
deduct tax in accordance with the provisions of Sec 194-IA
advance
fee or any
other
charges of
similar
nature
maintenance
fee
electricity
or water
facility fee
car parking
fee
club
membership
fee
Consideration for transfer
of any immovable property
includes all charges of the
nature of :
Explanation
regarding
consideration
which are incidental to transfer of the immovable property
Expl. inserted by Union Budget 2019
23. Applicability and Rate of TDS Individual or a HUF other than those not subject to Tax Audit in the
immediately preceding FY
responsible for paying to a resident any income by way of rent
rate of 5%
Threshold limit
Time of deduction
Tax has to be deducted at source only if the amount of such rent exceeds Rs. 50,000 for a month
or part of a month during the PY
• At the time of credit of such rent to the account of the payee or
• At the time of payment thereof in cash or by issue of cheque or draft or by any other mode,
whichever is earlier.
Payment of Rent by Certain individuals or HUF - Sec 194 IB
Non-applicability of TAN Requirement of obtaining TAN shall not apply to the person required to
deduct tax in accordance with the provisions of Sec 194-IB
Requirement to furnish PAN
Sec 206 AA requires providing of PAN, failing which tax shall be deducted at a higher rate of 20%.
As per the Sec 206 AA, deduction shall not exceed the amount of rent payable for the last month
of the previous year or the last month of the tenancy, as the case may be.
24. Applicability and
Rate of TDS
Any person responsible for paying to a resident any sum by way of consideration, not being consideration
in kind, under a Joint Development Agreement, to deduct income-tax at the rate of 10%
Payment under Joint Development Agreement - Sec 194 IC
Time of deduction Such deduction should be made at the time of credit of such income to the account of the payee
or at the time of payment of such income, whichever is earlier.
Mode of payment may be by cash, cheque, draft or any other mode
Non-Applicability of
Sec 194-IA
Since, TDS under JDA is covered in this Sec, Sec 194-IA (Transfer of Immovable Property) shall not apply
Meaning of specified agreement (JDA) - Sec 45(5A)
It means a registered agreement in which a person owning land or building or both, agrees to allow another person to
develop a real estate project on such land or building or both
The consideration, in this case, is a share, being land or building or both in such project; part of the consideration may also be in cash
25. Applicability and Rate of TDS Every person, who is responsible for paying to a resident any sum by way of
Fees for
professional
services
Fees for
technical
services
Any remuneration or fees or
commission, by whatever name
called, other than Salary, to a
director of a company
Royalty
Non-compete fees
referred to in sec 28(va)c
shall deduct tax at source at the rate of 5%
However, in case of a payee, engaged only in the business of operation of call centre, the TDS will be at 2%
Time of
deduction
Such deduction should be made at the time of credit of such income to the account of the payee or at the time of
payment of such income, whichever is earlier.
Mode of payment may be by cash, cheque, draft or any other mode
Fees for Professional or Technical Services - Sec 194J
Threshold limit
No deduction required if the amount of fees or the aggregate of the amounts of fees during a FY does not exceed Rs. 30,000 in
the case of fees for professional services, fees for technical services, royalty and non-compete fees
26. Meaning of Professional services
Professional services means services rendered by a person in the course of carrying on legal, medical, engineering or architectural
profession or the profession of accountancy or technical consultancy or interior decoration or advertising or such other profession
as is notified by the CBDT for the purposes of Sec 44 AA or of this Sec.
Contd.
Non- Applicability
An individual or HUF not subject to Tax Audit in the immediately preceding FY is not liable to deduct tax at source
An individual or HUF shall not be liable to deduct TDS, in case such sum is credited or paid exclusively for personal purposes
Meaning of Fees for technical services Means any consideration for rendering of any of the following services:
Managerial services
Technical services
Consultancy services
Provision of services of technical or other personnel
The term does not include
Consideration for any construction, assembly, mining
Consideration which is chargeable under the head ‘Salaries’
27. Applicability The person responsible for paying to a resident any sum in the nature of
compensation or the enhanced compensation the consideration or the enhanced consideration
on account of compulsory acquisition, under any law for the time being
in force, of any immovable property (other than agricultural land)
Rate of TDS The amount of tax to be deducted is 10% of such sum
Time of deduction
The tax should be deducted at the time of payment of such sum in cash or by issue of a cheque
or draft or by any other mode, whichever is earlier
Threshold limit If the amount of such payment or, the aggregate amount of such payments to a resident during
the FY does not exceed Rs. 2,50,000 then no deduction is required
Payment of Compensation on Acquisition of Certain
Immovable Property - Sec 194LA
Non-applicability of TDS under Sec 194LA
No TDS required where payment is made in respect of any award or agreement which has been exempted from levy of income tax
under Sec 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013
28. Special rate of tax on interest received by non-residents from notified infrastructure debt funds
Interest income received by a non-corporate non-resident or a foreign company from notified
infrastructure debt funds would be subject to tax at a concessional rate of 5%
Rate of TDS
The amount of tax to be deducted is 5% on interest paid/credited by such fund to a non-
resident/foreign company
Time of deduction Such deduction should be made at the time of credit of such income to the account of the payee
or at the time of payment of such income, whichever is earlier.
Mode of payment may be by cash, cheque, draft or any other mode
Income by way of Interest from Infrastructure Debt Fund -
Sec 194 LB
Applicability
29. Applicability and Rate of TDS
Certain Income From Units of a Business Trust – Sec 194 LBA
Particulars Recipient Rate
• Distributing any interest received or receivable by it from a Special Purpose Vehicle
(SPV) or
• Any income received from renting or leasing or letting out any real estate asset owned
directly by it,
• to its unit holders
Any Resident 10%
Distributing any interest income received or receivable by it from a SPV to its unit holders Any Non-resident 5%
Distributing any income received from renting or leasing or letting out any real estate
asset owned directly by it to its unit holders
Non-resident (not
being a company)
30%
Distributing any income received from renting or leasing or letting out any real estate
asset owned directly by it to its unit holders
Foreign Company 40%
Business Trust Means an Infrastructure Investment Trust or a Real Estate Investment Trust
which are listed in a stock exchange
Special Purpose Vehicle SPV is an entity through which a business trust holds real estate assets
30. Income in Respect of Units of Investment Fund – Sec 194LBB
Applicability Income distributed by an Investment Fund to its unit holder other than in the nature
of PGBP (PGBP income is taxable in the hands of the fund)
Rate of TDS Where the Payee is a:
• Resident – 10%
• Non-resident (other than company) – 30%
• Foreign Company – 40%
In case of Non-residents, TDS shall not be deducted if the distributed income is not
chargeable to tax for such person as per provisions of Income-tax
Investment
Fund
• Means any fund established or incorporated in India in the form of a Trust or a Company or
a LLP or a body corporate
• which has been granted a certificate of registration as a Category I or a Category II
Alternative Investment Fund and is regulated under SEBI Regulations
31. Income in Respect of Investment in Securitization Trust – Sec
194LBC
Applicability Income payable to an investor in respect of investment in a Securitisation trust
Rate of TDS Payee Rate
Resident Individuals and HUF 25%
Residents other than Individuals and HUF 30%
Non-resident (other than company) 30%
Foreign Company 40%
Securitisation
Trust
Means a trust, being a—
• Special purpose distinct entity as SEBI (Securitised Debt Instruments) regulations or
• Special Purpose Vehicle as defined in, and regulated by, the guidelines on securitisation of
standard assets issued by RBI or
• Trust set-up by a securitisation company or a reconstruction company formed, for the
purposes of the Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002, or in pursuance of RBI guidelines
32. Concessional rate of tax on interest on foreign currency borrowings by an Indian company or business trust
To avail this concessional rate, the borrowing should be from a source outside India :
Under a loan agreement at any time between 1.7.2012 and 30.6.2020 or
By way of issue of any long-term bond, during the period between 1.10.2014 and 30.6.2020 and approved by the CG
Rate of TDS The amount of tax should be deducted @ 5%
Income by way of Interest from an Indian company - Sec 194LC
Income by way of Interest on Certain Bonds and Government
Securities – Sec 194 LD
Any income by way of interest payable during the period between 1.6.2013 and 30.6.2020 in respect
of investment made by an Foreign Institutional Investor or Qualified Foreign Investor in a rupee
denominated bond of an Indian company or a Government security, shall be subject to tax
deduction at source at a concessional rate of 5%
Applicability and
Rate of TDS
Time of deduction
Any such interest shall, at the time of credit of such income to the account of the payee or at the time of
payment of such income in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier
33. Applicability and rate of TDS
For carrying out any work (including
supply of labour for carrying out any
work) in pursuance of a contract; or
By way of commission (not being
insurance commission referred to in
Sec 194D) or brokerage; or
By way of fees for professional
services
Time of deduction
The rate of deduction is at 5%
The tax should be deducted at the time of credit of such sum or at the
time of payment of such sum, whichever is earlier.
Threshold limit No TDS shall be deducted if the such sum or aggregate of such sums does not exceed Rs. 50 lakhs during the FY
An individual or a HUF responsible for paying any sum during the financial year to any resident:
Payment of Certain Sums by Certain Individuals or HUF – Sec 194M
Non-applicability An individual or a Hindu undivided family is not liable to deduct tax at source, if:
They are required to
deduct tax at source
under Sec 194C
They are required to
deduct tax at source
under Sec 194H on
commission
They are required to
deduct tax at source
under Sec 194J
Inserted by Union Budget 2019
34. Applicability and rate of TDS
every person being
a banking company
a co-operative society engaged in
the business of banking
a post office
• Responsible for paying, in cash, any sum or
aggregate of sums exceeding Rs. 1 crore
during the PY to any person,
• shall deduct TDS @ 2% exceeding Rs. 1 crore
Payment of Certain Amounts in Cash – Sec 194 N
Time of deduction This deduction is to be made at the time of payment of such sum
Non-applicability
The government
Any banking company or co-operative society engaged in carrying on the business of banking or a post-office
Any business correspondent of a banking company or co-operative society engaged in carrying on the business of banking, in
accordance with the RBI guidelines
Any white label ATM operator of a banking company or co-operative society engaged in carrying on the business of banking
Such other person or class of persons notified by the central government in consultation with the RBI
In case of payments made to
Inserted by Union Budget 2019
35. Applicability and rate of TDS Sellers of certain goods are required to collect tax from the buyers at the specified rates
Nature of Goods Percentage
(i) Alcoholic liquor for human consumption 1%
(ii) Tendu leaves 5%
(iii) Timber obtained under a forest lease 2.5%
(iv) Timber obtained by any mode other than (iii) 2.5%
(v) Any other forest produce not being timber or tendu leaves 2.5%
(vi) Scrap 1%
(vii) Minerals, being coal or lignite or iron ore 1%
Specified rates
Tax Collection at Source – Sec 206 C
36. Every person, being a seller, who receives any amount as consideration for sale of a motor vehicle of the value exceeding Rs. 10
lakhs, shall collect tax from the buyer @1% of the sale consideration
Non-applicability
• No collection of tax shall be made in the case of a resident buyer furnishes to the person responsible for collecting tax,
• a declaration that the specified goods are to be utilised for the purpose of
• manufacturing, processing or producing articles or things or for the purposes of generation of power and not for
trading purposes.
Contd.
Every person who grants a lease or a license or enters into a contract or otherwise transfers any right or interest in any
parking lot toll plaza a mine or a quarry
to another person (other than a public sector company) for the use of such parking lot or toll
plaza or mine or quarry for the purposes of business
At the rate of 2%
37. Consequences of Non-compliance of TDS Provisions
Sec Nature of Default Consequence
40 (a) (i) Non deduction or non payment of TDS on interest, royalty,
FTS or any sum payable to non-residents
100% disallowance of expenditure, shall be allowed
in year of deduction
201 (1) TDS not withheld or deposited properly Deemed to be Assessee in default
201 (1A) TDS not withheld or deposited properly Interest per month or part of the month
Non-deduction - @ 1%
Non-payment - @1.5%
221 TDS withheld but not paid Penalty not exceeding tax not paid
271C Tax not withheld or short withheld Penalty not exceeding the tax not withheld
234E Failure to file TDS Return • Penalty of Rs 200 per day shall be paid by the
assessee until the time the default continues.
• Penalty not exceeding tax not paid
234F Failure to furnish TDS Returns or Furnishing of incorrect
information
Penalty of Rs. 10,000 to Rs.1,00,000
