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Rate of TDS (Tax Deducted at Source)

DEDUCTION OF TAX AT SOURCE (TDS)

LIABILITY FOR TDS

Any person responsible for making payment of certain category of incomes is liable to deduct tax at source at an appropriate occasion.

The law prescribes time when the TDS is to be made, rate at which it should be made, when TDS should be paid to the Government and associated administrative responsibilities of payer (tax deductor) and payee (tax deductee) have been prescribed.

A. TDS Rate Chart for A.Y. 2014-15 on Payments other than Salary and Wages

Section   No. Nature of Payment Threshold
Total Payment
During the Year
Payment to
Individual
or HUF
Others
193 Interest on Debentures Rs. 5000/- 10% 10%
194 Deemed Dividend - 10% 10%
194 A Interest by banks (Other than interest on securities) Rs. 10000/- 10% 10%
194 A Interest by Others (Other than interest on securities) Rs. 5000/- 10% 10%
194 B Winnings from Lotteries / Puzzle / Game Rs. 10000/- 30% 30%
194 BB Winnings from Horse Race Rs. 5000/- 30% 30%
194 C (1) Payment to Contractors Rs. 30000/- 1% 2%
194 C (2) Payment to Sub-Contractors / for Advertisements Rs. 30000/- 1% 2%
194 D Payment of Insurance Commission Rs. 20000/- 10% 10%
194 EE Out of deposits under NSS Rs. 2500/- 20% NA
194 G Commission on Sale of Lottery tickets Rs. 1000/- 10% 10%
194 H Commission or Brokerage Rs. 5000/- 10% 10%
194 I Rent of Land, Building or Furniture Rs. 180000/- 10% 10%
194 I Rent of Plant & Machinery Rs. 180000/- 2% 2%
194 J Professional / technical services, royalty Rs. 30000/- 10% 10%
194 J
(1)
Remuneration / commission to director of the company - 10% 10%
194 J (ba) w.e.f. 01 .07.2012, Any remuneration / fees / commission to a director of a company, other than those on which tax is deductible under section 192. - 10% 10%
194 LA Compensation on acquisition of certain immovable property Rs. 2,00,000/- 10% 10%
194 IA Compensation on transfer of certain immovable property other than agricultural land (w.e.f. 01 .06.2013) Consideration is
Rs. 50 lakh or
more.
1% 1%
194LD Interest on certain bonds & Govt. securities (w.e.f. 01 .06.2013)   5% 5%

  1. Copies of Form Nos. 15G and 15H received by the payer have to be filed with the Chief Commissioner Commissioner within 7 days of the succeeding month.
  2. If the person responsible for deducting and paying tax fails to do so, he shall be considered as an assessee in default, liable to pay interest @ 12% p.a. on the amount of such tax from the date on which such tax was deductible to the date of actual payment, and penalty, not exceeding the amount of tax and rigorous imprisonment ranging from 3 months to 7 years and fine. The interest payment needs to be paid before filing of Quarterly Return.
  3. Sec. 199 – Credit for tax deducted :
    1. Credit will be given for the assessment year in which such income is assessble.
    2. Where such income is assessable in the hands of any other person, credit shall be given to such other person.
    3. When any security, property etc. is jointly owned by two or more persons not constituting partnership, credit for TDS on income there from shall be given to such persons in the proportion in which the income is distributed.
  4. A payee from whose income TDS is made must intimate his PAN to tax deductor. Tax deductor must to quote PAN of payees in TDS Certificate and TDS return [Sec. 139A].
  5. TAN/TDCAN to be quoted on all quarterly statements of TDS/ TCS section 203A(ba).
  6. A declaration for non-deduction of tax u/s. 197A can be furnished by the assessee only if his aggregate income is less than threshold limit. Senior Citizens can file declaration if tax on their estimated total income is likely to be NIL.
  7. Disallowance due to non-deduction: If tax deductible u/ss. 193, 194A, 194C, 194H, 194J and 195 is not deducted/paid before applicable due dates, the relevant expenditure otherwise allowable in computing Total Income of the payer would be liable for disallowance u/s 40(a)(i)/(ia). The deduction will be allowed in the year in which TDS is paid. For details see section 40(a).

TIME SCHEDULE

Nature of Activity Time Frame
Time of Deduction Salary : At the time of payment
Others : When income paid or credited to the account including "payable" or
"suspense" account whichever is earlier
Time of deposit of tax (Other than on behalf of Government) (a) If credited on the date on which accounts are made, within two months from the end of the month in which income is credited.
  (b) Any other case, within one week from the end of the month in which deduction is made.
Statement   For each Quarter
TDS Type Forms For all category of Statements  
Salary No 24Q No. 24 Q Q1 : April – June – 15th July
Non Resident No. 26 Q Q2 : July – September – 15th October
All Others No. 27 Q Q3 : October – December – 15th January
    Q4 : January – March – 15th June
Electronic For   every office of Government and the principal officer in the case of every company, firm, whose total sales, gross receipts or turnover from the business or profession carried on by it exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such income is credited or paid

Consequence of non compliance of TDS provisions :

Sr.No. Section Default Default Consequence
Section Effect
1 197A Delay, no submission of no TDS declarations 272A(2)(j) Rs. 100 per day / Max. Tax Amount on Decleration
2 Chapter XVII – B Fails to deduct the whole or any part of TDS 271C(1)(a) (i) Penalty of a sum equal to the amount of TDS not so deducted.
(ii) Fails to deduct the whole or any part of TDS:
Penalty :- a sum equal to the amount of TDS not so deducted. [sec. 271C(1)(a)]
3 200 Delay in payment of TDS 201(1A) Interest @ 1% p.m
4 200 Delay, no submission of Quarterly TDS Statement 272A(2)(k) Rs.100 per day / Max. Tax Amount of TDS in of Quarterly
TDS Statement
5 203A Default in the matter of TAN 272BB Penalty Rs.10,000

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