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TDS Rates for Payment to Resident Persons

TDS Stands for ‘Tax Deducted at Source’. It is an income tax that is collected at the source from where a person’s income is generated.

TDS rates

TDS is applicable to the various payments such as salaries, interest received, the commission received, etc.

But note it is not applicable to all payments and persons for all transactions. 

There are some specific categories of payments on which TDS is applicable.

We can categorize TDS rates for payment to Residents as below:

  1. Salaries to Individuals (Sec.192)
  2. Payment Other Than Salary

TDS Rates for Salaries to Individuals (Sec.192)

All Resident Individuals

[Below 60 Years]

S.N. Total Income Tax Payable
(a)
Up to 250000
Nil
(b)
From 250010 up to 500000
(Total Income less 250000) x 10%
(c)
From 500010 up to 1000000
25000 + (Total Income less 500000) x 20%
(d)
1000010 and above
125000 + (Total Income less 1000000) x 30%

Resident Senior Citizens

[Above 60 but Below 80 Years]

S.N. Total Income Tax Payable
(a)
Up to 300000
Nil
(b)
From 300010 up to 500000
(Total Income less 300000) x 10%
(c)
From 500010 up to 1000000
20000 + (Total Income less 500000) x 20%
(d)
1000010 and above
120000 + (Total Income less 1000000) x 30%

Resident Very Senior Citizens

[Above 80 Years]

S.N. Total Income Tax Payable
(a)
Up to 500000
Nil
(b)
From 500010 up to 1000000
(Total Income less 500000) x 20%
(c)
1000010 and above
100000 + (Total Income less 1000000) x 30%

TDS Rates for Payments Other Than Salary

Section Nature of Payment Rate of TDS (%)
192A
Accumulated Balance of PF (if taxable)
10
193
Interest on Securities
10
194
Deemed Dividend u/s 2(22)(e)
10
194A
Interest other than Interest on Securities
10
194B
Winning from Lottery/Crossword Puzzle/Card Games/Other Games
30
194BB
Winning from Horse Races
30
194C
Contractors including Sub-Contractors [Individual & HUF]
1
194C
Contractors including Sub-Contractors [Other than Individual & HUF]
2
194D
Insurance Commission
5
194DA
Sum under a Life Insurance Policy- other than amount covered u/s (10D)
1
194EE
Deposits under National Saving Scheme, 1987
10
194F
Repurchase of Units of Mutual Funds/UTI
20
194G
Commission on Sale of Lottery Tickets
5
194H
Commission or Brokerage
5
194I
Rent [Plant/Machinery/Equipment]
2
194I
Rent [Land/Building(including Furinitre/Fittings)]
10
194IA
Payment on transfer of Immovable Property other than Agricultural Land
1
194J
Fees for Professional / Tech. Services/ Royalty
10
194LA
Compensation on acquisition of immovable property
10
194LBA
Interest paid by Business Trust/ Real Estate Investment Trust to its Unit Holder u/s 115UA
10
194LBB
Distributed Income referred u/s 115UB (Alternate Investment Fund)
10
194LBC
Income from Investment in Securitization Trust referred u/s 115TCA [Individual & HUF]
25
194LBC
Income from Investment in Securitization Trust referred u/s 115TCA [Other than Individual & HUF]
30

1. TDS Rate on Bank FD:

 The interest income you earn from fixed deposits is fully taxable.

1.1 TDS rate on FD if PAN details are shared:

  • For Indian Resident – As per section 194A of Income Tax Act (1961), TDS on interest earned from fixed deposits shall be deducted @ 10% if the interest income exceeds Rs. 40,000 during one financial year.
  • For Non-Resident Indian– As per section 195 of Income Tax Act (1961), if you are an NRI investor, TDS on interest earned from fixed deposits shall be deducted @ 30% plus applicable surcharge and cess.

1.2 TDS rate on FD if PAN details are not shared:

If you do not share your PAN details with your bank, then they will deduct the TDS:

  • 20% if you are an Indian resident
  • 30% plus applicable surcharge and cess if you are a non-resident Indian customer

1.3 Form 15G and Form 15H for no TDS deduction

If you have more than Rs 40,000 interest income in a year, but your Total Income (including interest income) is less than the minimum exempt income (Rs 2.5 lakh for FY 2019-20).

You may submit Form 15G if you are not a Resident Senior Citizen to the Bank for no TDS deduction.

The individuals whose age 60 years or more are called  Resident Senior Citizen.

But If you are a Resident Senior Citizen, then you should submit Form 15H to the Bank for no TDS deduction.

2. Payments to Contractors [194C]

2.1 Person liable to deduct TDS 

Any person, other than (Individual or HUF who is not subject to Audit u/s 44AB(a) and 44AB(b)), responsible for making payment to a resident contractor or sub-contractor for carrying out any work (including supply of labour) is liable to deduct tax at source under Section 194C.

2.2 When to deduct TDS

Deduct TDS, If single contract value exceeds Rs. 30000 or Aggregate value during the financial year exceeds Rs. 100000.

2.3 Rates of TDS

  • Payments to Resident Individual or HUF: 1%
  • Payments to Other than Resident Individual or HUF: 2%

2.4 Time for Deduction

At the of credit or payment which is earlier.

2.5 Time Limit for Deposit

Government Deductor

Non-Government Deductor

Tax is paid without production of an Income-tax challan on the same day on which tax is deducted           

Amount is paid or credited in the month of March on or before April 30

 

Tax deposited with Income-tax challan on or before 7th day from the end of the month in which tax is deducted

Amount is paid or credited before March 1 on or before 7th day from the end of the month in which tax is deducted

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