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New TDS Rate Chart for the Financial year 2020-21

TDS-Chart-2020
blog dateApr 15, 2020 | 8 min read | views 35636

TDS compliances are the most common yet most important compliance for the business world. Every year during the finance budget government announces the TDS rates which shall be applicable for the coming Financial Year. Due to the changing economic scenario and other factors, the government introduces a few new sections or amends certain existing sections.

The Finance Act 2020 has introduced below new TDS sections/key amendments in TDS Sections which the business enterprise must be aware of:

TDS Details Section Name TDS Rates (in %) (AY 2021-22) Expert Remarks
TDS on Mutual Fund Income 194K 10%  
TDS on E-Commerce Transactions 194O 1% (5% in case of no PAN given to E-commerce operator) Applicable to All E-Commerce Companies
TDS on Technical Services 194J 2% This will open up the litigation as clear guidelines are not given to identify and differentiate the technical services from professional services on which 10% TDS is applicable.
TDS on Salaries 192 New Reduced Slab rate for Salaries People introduced Companies can take a declaration from employees as to which method they want to follow, and employee can change their election while filling their return.

For the benefit of our readers, we have summarized complete TDS Rates applicable for FY 2020-21 (AY 2021-22).

TDS Rate For Assessment year 2020-21 and Assessment year 2021-22:

Particulars TDS Rates (in %)(AY 2020-21) TDS Rates (in %)(AY 2021-22)
1 where the person is resident in India-    
Section 192: Payment of salary Normal Slab Rate Normal Slab Rate/New Reduced Slab Rate
Section 192A: Payment of accumulated balance of provident fund which is taxable in the hands of an employee.(Monetary Limit – Rs 50,000) 10 10
Section 193: Interest on securities    
a) any debentures or securities for money issued by or on behalf of any local authority or a corporation established by a Central, State or Provincial Act; 10 10
b) any debentures issued by a company where such debentures are listed on a recognized stock exchange in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and any rules made thereunder; 10 10
c) any security of the Central or State Government; [i.e. 8% Savings (Taxable) Bonds, 2003 and 7.75% Saving (Taxable) Bonds, 2018] (Monetary Limit – Rs 10,000) 10 10
d) interest on any other security 10 10
Section 194: Dividend to Domestic Companies 10 (Monetary Limit – Rs 2,500) 10 (Monetary Limit – Rs 5,000) (w.e.f. 01/04/2020)
Section 194A: – Interest other than interest on securities – Others (Monetary Limit – Rs 5,000) 10 10
Section 194A: Banks / Co-operative society engaged in business of banking / Post Office (Monetary Limit – Rs 40,000) 10 10
Section 194A: Senior citizen Interest To Senior Citizen from Deposits with banks. Deposits with post offices. Fixed deposit schemes. Recurring deposit schemes. (Monetary Limit – Rs 50,000) 10 10
Section 194B: Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort (Monetary Limit – Rs 10,000) 30 30
Section 194BB: Income by way of winnings from horse races (Monetary Limit – Rs 10,000) 30 30
Section 194C: Payment to contractor/sub-contractor (Monetary Limit – Rs 30,000 per contract or Rs 1,00,000 for aggregate amount during the year)    
a) HUF/Individuals 1 1
b) Others 2 2
Section 194D: Insurance commission (Monetary Limit – Rs 15,000) 5 5
Section 194DA: Payment in respect of life insurance policy w.e.f. 1/9/2019, the tax shall be deducted on the amount of income comprised in insurance pay-out (Monetary Limit – Rs 1,00,000) 5 5
Section 194EE: Payment in respect of deposit under National Savings scheme (Monetary Limit – Rs 2,500) 10 10
Section 194F: Payment on account of repurchase of unit by Mutual Fund or Unit Trust of India 20 20
Section 194G: Commission, etc., on sale of lottery tickets (Monetary Limit – Rs 15,000) 5 5
Section 194H: Commission or brokerage (Monetary Limit – Rs 15,000) 5 5
Section 194-I: Rent (Monetary Limit – Rs 2,40,000)    
a) Plant & Machinery 2 2
b) Land or building or furniture or fitting 10 10
Section 194-IA: Payment on transfer of certain immovable property other than agricultural land (Monetary Limit – Consideration exceeding Rs 50,00,000) 1 1
Section 194-IB: Payment of rent by individual or HUF not liable to tax audit (Monetary Limit – Rent for the month or part of the month exceeds Rs 50,000) 5 5
Section 194-IC: Payment of monetary consideration under Joint Development Agreements 10 10
Section 194J: Payment for fees for Technical services, Professional services or royalty etc. (Monetary Limit –Rs 30,000 p.a)    
a) Cases, wherein, the payee is engaged in the business of the operation of Call Centre only 2 2
b) In case of fees for technical services (not being a professional royalty where such royalty is in the nature of consideration for sale, distribution or exhibition of cinematographic film): New Amendment effective from 1st April 2020) 10 2
c) Professional royalty where such royalty is in the nature of consideration for sale, distribution or exhibition of cinematographic film 10 10
d) In case of fees for any other professional services 10 10
e) In case the payee fails to furnish PAN 20 20
Section 194K: Payment of any income in respect of a) Units of a Mutual Fund as per Section 10(23D) b) Units from the administrator c) Units from specified company New Amendment effective from 1st April 2020) N.A. 10
Section 194LA: Payment of compensation on acquisition of certain immovable property (Monetary Limit –Rs 2,50,000 p.a.) 10 10
Section 194LBA(1): Business trust shall deduct tax while distributing, any interest received or receivable by it from a SPV or any income received from renting or leasing or letting out any real estate asset owned directly by it, to its unit holders. 10 10
Section 194LBB: Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)] 10 10
Section 194LBC: Income in respect of investment made in a securitisation trust (specified in Explanation of section115TCA) 25% in case of Individual or HUF 30% in case of other resident person 25% in case of Individual or HUF 30% in case of other resident person
Section 194M: Payment of commission (not being insurance commission), brokerage, contractual fee, professional fee to a resident person by an Individual or a HUF who are not liable to deduct TDS under section 194C, 194H, or 194J. Tax shall be deducted under section 194M when aggregate of sum credited or paid during a financial year exceeds Rs. 50 lakh. 5 5
Section 194N: a) Filed the returns of income for all of the three assessment years relevant to the three previous years and cash withdrawals exceeding 1 cr 2 2
b) Not Filed the returns of income for all of the three assessment years relevant to the three previous years: (This provision is applicable w.e.f. 01 July, 2020) Cash withdrawals from 20 Lakhs to 1 Cr NA 2
Cash withdrawals exceeding 1 Cr NA 2% till 30 June, 2020 and 5% from 01 July, 2020
Section 194O: Applicable for E-Commerce operator for sale of goods or provision of service facilitated by it through its digital or electronic facility or platform. In case the E-commerce participant does not furnish PAN or Aadhar Number to the e-commerce operator, TDS shall be deducted at the rate of 5% under section 206AA of the Act (This Section is inserted by Finance Act, 2020 which is applicable from 01/10/2020) N.A. 1

Refer our separate discussion on TDS on Non-residents or write an email to our expert at Info@tya.co.in for a free analysis of your TDS on non-resident queries.

In case you wish to automate your TDS compliances, you can subscribe to automated procurement software.

As support to MSMEs in this difficult time, TYASuite is offering a 6-month free subscription to their E-Procurement Software.

 

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Deepak Kumar Daga

Professional & Qualified Chartered Accountant with more than 9+ years Experience.
Expert in the field of Direct Tax & Indirect taxes Consultancy, Bank Audits, Statutory Audit, Tax Audit, Accounting, GST, Income Tax, Concurrent Audit, Valuation of Securities and Financial Assets.