INTERVIEW QUESTIONS TAX TAX DEDUCTED AT SOURCE (TDS/ TCS) DETAILS

Question: ​What are the payments covered under the TDS mechanism and the rates for deduction of tax at source?

Answer: Tax is deductible at source at the rates given in table (infra). If PAN of the deductee is not intimated to the deductor, tax will be deducted at source by virtue of section 206AA either at the rate given in the table or at the rate or rates in force or at the rate of 20 per cent, whichever is higher. Further, under section 94A(5), if payment or credit is made or given to a deductee who is located in a notified jurisdictional area, tax is deductible at the rate given in the table or at the rate of 30 per cent, whichever is higher.

TDS rates for the financial year 2016-17 are as follows:—

CATEGORY A - WHEN RECIPIENT IS RESIDENT ​
=========================================

Nature of payment TDS (SC : Nil, EC : Nil, SHEC : Nil)

• Sec. ​192 - Payment of salary [normal tax rates are applicable – SC : 15% (if net income exceeds Rs. 1 crore), EC : 2% and SHEC : 1%] 15%

• Sec. ​192A - Payment of taxable accumulated balance of provident fund 10

• Sec. 193 - Interest on securities—
a. interest on (a) debentures/securities for money issued by or on behalf of any local authority/statutory corporation, (b) listed debentures of a company [not being listed securities in demat form], (c) any security of the Central or State Government [i.e., 8% Savings (taxable) Bonds, 2003, but not any other Government security] 10

b. any other interest on securities (including interest on non-listed debentures) 10

• Sec. 194 - Dividend—
a. deemed dividend under section 2(22)(e) 10
b. any other dividend Nil

• Sec. 194A - Interest other than interest on securities 10

• Sec. 194B - Winnings from lottery or crossword puzzle or card game or other game of any sort 30

• Sec. 194BB - Winnings from horse races 30

• Sec. 194C - Payment or credit to a resident contractor/sub-contractor—

a. payment/credit to an individual or a Hindu undivided family 1

b. payment/credit to any person other than an individual or a Hindu undivided family 2

• Sec. 194D - Insurance commission 10
- payment/credit to an individual or a Hindu undivided family 5
- payment/credit to any person other than an individual or a Hindu undivided family 10​
​
• Sec. 194DA - Payment in respect of life insurance policy (applicable from October 1, 2014) 2%

• Sec. 194EE - Payment in respect of deposits under National Savings Scheme, 1987 20

• Sec. 194F - Payment on account of repurchase of units of MF or UTI 20

• Sec. 194G - Commission on sale of lottery tickets 10

• Sec. 194H - Commission or brokerage 10

• Sec. 194-I - Rent—
a. rent of plant and machinery 2

b. rent of land or building or furniture or fitting 10

• Sec. 194-IA​ - Payment/credit of consideration to a resident transferor for transfer of any immovable property (other than rural agricultural land) 1

• Sec. 194J - Professional fees, technical fees, royalty or remuneration to a director 10

• Sec. 194LA - Payment of compensation on acquisition of certain immovable property 10

• Sec. 194LBA(1) - Payment of the nature referred to in section 10(23FC) or section 10(23FC)(a) (with effect from June 1, 2016) or section 10(23FCA) by business trust to resident unit holders 10

• Sec. 194LBB - Payment in respect of units of investment fund specified in section 115UB 10

• Sec. 194LBC(1) - Payment in respect of an investment in a securitisation trust specified in clause (d) of the Explanation occurring after section 115TCA (with effect from June 1, 2016) -
- if recipient is an individual or a Hindu undivided family 25
- if recipient is any other person 3​0

CATEGORY B - WHEN RECIPIENT IS NON-RESIDENT OR FOREIGN COMPANY

​ Aggregate payment or credit subject to TDS during the financial year 2014-15 → If recipient is non-resident non-corporate person ​​​
​If recipient is non-domestic company​ ​ ​
​ Rs. 1 crore or less More than Rs. 1 crore ​ ​​ Rs. 1 crore or less​ More than Rs. 1 crore but not more than Rs. 10 crore​ More than Rs. 10 crore
​ If recipient is non-resident individual/HUF/AOP/BOI/artificial judicial person ​If recipient is non-resident co-operative society/firm​ ​​ ​
​ Nature of payment TDS (inclusive of SC : Nil, EC : 2%, SHEC : 1%) TDS (inclusive of SC : 15%, EC : 2%, SHEC : 1%) TDS (inclusive of SC : 12%, EC : 2%, SHEC : 1%) TDS (inclusive of SC :Nil, EC : 2%, SHEC : 1%) TDS (inclusive of SC : 2%, EC : 2%, SHEC : 1%) TDS (inclusive of SC : 5%, EC : 2%, SHEC : 1%)
• Sec. 192 - Payment of salary [normal tax rates are applicable – SC : 10% (if net income exceeds Rs. 1 crore), EC : 2% and SHEC : 1%] – – – – – –
• Sec. 192A - Payment of taxable accumulated balance of provident fund​ 10.3 11.845​ – – – –
• Sec. 194B - Winnings from lottery or crossword puzzle or card game or other game of any sort 30.9 35.535 34.608 30.9 31.518 32.445
• Sec. 194BB - Winnings from horse races 30.9 35.535 34.608 30.9 31.518 32.445
• Sec. 194E - Payment to a non-resident foreign citizen sportsman/entertainer or non-resident sports association 20.6 23.69 23.072 20.6 21.012 21.63
• Sec. 194EE - Payment in respect of deposits under National Saving Scheme, 1987 20.6 (10.3% from June 1, 2016) 23.69 (11.845% from June 1, 2016)​ 23.072 (11.536% from June 1, 2016)​ NA NA NA
• Sec. 194F - Re-purchase of units of MF or UTI 20.6 23.69 23.072 NA NA NA
• Sec. 194G - Commission on sale of lottery tickets 10.3 (5.15% from June 1, 2016) 11.845 (5.9225% from June 1, 2016) 11.536 (5.768% from June 1, 2016) 10.3 (5.15% from June 1, 2016) 10.506 (5.253% from June 1, 2016) 10.815 (5.4075% from June 1, 2016)
• Sec. 194LB - Payment/credit by way of interest by infrastructure debt fund 5.15 5.9225 5.768 5.15 5.253 5.4075
• Sec. 194LBA(2) - Payment of the nature referred to in ​section 10(23FC) by business trust to unit holders (applicable from October 1, 2014) 5.15 5.9225 5.768 5.15 5.253 5.4075
• Sec. 194LBA(3) - Payment of the nature referred to in ​section 10(23FCA) by business trust to unit holders 30.9 35.535 34.608 41.2 42.024 43.26
• Sec. 194LBB - Payment in respect of units of investment fund specified in section 115UB 10.3 (30.9% from June 1, 2016) 11.845 (35.535% from June 1, 2016) 11.536 (34.608% from June 1, 2016) 10.3 (41.2% from June 1, 2016) 10.506 (42.024% from June 1, 2016) 10.815 (43.26% from June 1, 2016)
• Sec. 194LBC(2) - Payment in respect of an investment in a securitisation trust specified in clause (d) of the Explanation occurring after section 115TCA (with effect from June 1, 2016) 30.9 35.535 34.608 41.2 42.024 43.26
• Sec. 194LC - Payment/credit of interest by an Indian specified company on foreign currency approved loan/long-term infrastructure bonds (with effect from October 1, 2014, any bond) from outside India 5.15 5.9225 5.768 5.15 5.253 5.4075
• Sec. 194LD - Interest on a rupee denominated bond of an Indian company or Government security (from June 1, 2013) 5.15 5.9225 5.768 5.15 5.253 5.4075
• Sec. 195 - Payment/credit of other sum to a non-resident — - - - - - -
a. income of foreign exchange assets payable to an Indian citizen 20.6 23.69 23.072 NA NA NA
b. income by way of long-term capital gains referred to in section 115E or section 112(1)(c)(iii) 10.3 11.845 11.536 10.3 10.506 10.815
c. short-term capital gains under section 111A 15.45 17.7675 17.304 15.45 15.759 16.2225
​ d. any other long-term capital gains [not being covered by ​196D ​section 10(33), 10(36) and 10(38)] 20.6 23.69 23.072 20.6 21.012 21.63
e. income by way of interest payable by Government/Indian concern on money borrowed or debt incurred by Government or Indian concern in foreign currency (not being interest referred to in section 194LB or 194LC or 20.6 23.69 23.072 20.6 21.012 21.63
f. royalty [see Note 5] 10.3 11.845 11.536 10.3 10.506 10.815
g. royalty [not being royalty of the nature referred to in (f) supra] [see Note 6] – - - - - - -
□ where the agreement is made after March 31, 1961 but before April 1, 1976 10.3 10.845 11.536 51.5 52.53 54.075
□ where the agreement is made on or after April 1, 1976 10.3 10.845 11.536 10.3 10.506 10.815
h. fees for technical services [see Note 7] – - - - - - -
□ where the agreement is made after February 29, 1964 but before April 1, 1976 10.3 10.845 11.536 51.5 52.53 54.075
□ where the agreement is made on or after April 1, 1976 10.3 10.845 11.536 10.3 10.506 10.815
i. any other income 30.9 35.535 34.608 41.20 42.024 43.26
• Sec. 196B - Payment/credit of income from units (including long-term capital gains on transfer of such units) to an offshore fund 10.3 10.845 11.536 10.3 10.506 10.815
• Sec. 196C - Payment/credit of interest of foreign currency bonds or GDR (including long-term capital gains on transfer of such bonds) (not being dividend referred to in section 115-O) 10.3 10.845 11.536 10.3 10.506 10.815
• ​Sec. 196D - Payment/credit of income from securities (not being dividend, short-term or long-term capital gain) to Foreign Institutional Investors 20.6 23.69 23.072 20.6 21.012​ 21.63
​

Notes :

1. Under sections 192​ tax is deductible from salary. The payer shall calculate salary taxable in the hands of recipient. The amount so determined is subject to tax deduction under sections 192. Under sections 192A, tax is deductible on taxable accumulated balnce of provident fund. Under section 195, tax is deductible only if income is taxable in the hands of recipient in India. In any other case, gross payment is subject to tax deduction.

2. In Category B, tax is deductible at the above rates or the rates specified in ADT agreements entered into by the Central Government under section 90 (whichever is lower) [ section 2(37A)(iii)].

3. Tax is not deductible under section 192A, section 193, 194, 194A, 194DA, 194-I, or 194EE if the recipient makes a declaration in Form No. 15G/15H under the provisions of section 197A.

4. Under section 197 the recipient can apply the Assessing Officer in Form No. 13 to get a certificate of lower/no tax deduction. This benefit is, however, not available if tax is deductible under section 192A, section 194B, 194BB, 194E, 194EE, 194F, 194-IA, 194LBA, 194LB, 194LC, 196B, 196C or ​196D​.

5. Royalty payable by Government or an Indian concern in pursuance of an agreement made by non-resident with the Government or the Indian concern after March 31, 1976, where such royalty is in consideration for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book on a subject referred to in the first proviso to ​section 115A(1A) to the Indian concern or in respect of computer software referred to in the second proviso to ​section 115A(1A), to a person resident in India.

6. Not being royalty of the nature referred to above, payable by Government or an Indian concern in pursuance of an agreement made by non-resident with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to matter included in the industrial policy, the agreement is in accordance with that policy.

7. Fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by non-resident with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to matter included in the industrial policy, the agreement is in accordance with that policy.​

Tax is deductible at source at the rates given in table (infra). If PAN of the deductee is not intimated to the deductor, tax will be deducted at source by virtue of section 206AA either at the rate given in the table or at the rate or rates in force or at the rate of 20 per cent, whichever is higher. Further, under section 94A(5), if payment or credit is made or given to a deductee who is located in a notified jurisdictional area, tax is deductible at the rate given in the table or at the rate of 30 per cent, whichever is higher.

TDS rates for the financial year 2016-17 are as follows:—

CATEGORY A - WHEN RECIPIENT IS RESIDENT ​
=========================================

Nature of payment TDS (SC : Nil, EC : Nil, SHEC : Nil)

• Sec. ​192 - Payment of salary [normal tax rates are applicable – SC : 15% (if net income exceeds Rs. 1 crore), EC : 2% and SHEC : 1%] 15%

• Sec. ​192A - Payment of taxable accumulated balance of provident fund 10

• Sec. 193 - Interest on securities—
a. interest on (a) debentures/securities for money issued by or on behalf of any local authority/statutory corporation, (b) listed debentures of a company [not being listed securities in demat form], (c) any security of the Central or State Government [i.e., 8% Savings (taxable) Bonds, 2003, but not any other Government security] 10

b. any other interest on securities (including interest on non-listed debentures) 10

• Sec. 194 - Dividend—
a. deemed dividend under section 2(22)(e) 10
b. any other dividend Nil

• Sec. 194A - Interest other than interest on securities 10

• Sec. 194B - Winnings from lottery or crossword puzzle or card game or other game of any sort 30

• Sec. 194BB - Winnings from horse races 30

• Sec. 194C - Payment or credit to a resident contractor/sub-contractor—

a. payment/credit to an individual or a Hindu undivided family 1

b. payment/credit to any person other than an individual or a Hindu undivided family 2

• Sec. 194D - Insurance commission 10
- payment/credit to an individual or a Hindu undivided family 5
- payment/credit to any person other than an individual or a Hindu undivided family 10​
​
• Sec. 194DA - Payment in respect of life insurance policy (applicable from October 1, 2014) 2%

• Sec. 194EE - Payment in respect of deposits under National Savings Scheme, 1987 20

• Sec. 194F - Payment on account of repurchase of units of MF or UTI 20

• Sec. 194G - Commission on sale of lottery tickets 10

• Sec. 194H - Commission or brokerage 10

• Sec. 194-I - Rent—
a. rent of plant and machinery 2

b. rent of land or building or furniture or fitting 10

• Sec. 194-IA​ - Payment/credit of consideration to a resident transferor for transfer of any immovable property (other than rural agricultural land) 1

• Sec. 194J - Professional fees, technical fees, royalty or remuneration to a director 10

• Sec. 194LA - Payment of compensation on acquisition of certain immovable property 10

• Sec. 194LBA(1) - Payment of the nature referred to in section 10(23FC) or section 10(23FC)(a) (with effect from June 1, 2016) or section 10(23FCA) by business trust to resident unit holders 10

• Sec. 194LBB - Payment in respect of units of investment fund specified in section 115UB 10

• Sec. 194LBC(1) - Payment in respect of an investment in a securitisation trust specified in clause (d) of the Explanation occurring after section 115TCA (with effect from June 1, 2016) -
- if recipient is an individual or a Hindu undivided family 25
- if recipient is any other person 3​0

CATEGORY B - WHEN RECIPIENT IS NON-RESIDENT OR FOREIGN COMPANY

​ Aggregate payment or credit subject to TDS during the financial year 2014-15 → If recipient is non-resident non-corporate person ​​​
​If recipient is non-domestic company​ ​ ​
​ Rs. 1 crore or less More than Rs. 1 crore ​ ​​ Rs. 1 crore or less​ More than Rs. 1 crore but not more than Rs. 10 crore​ More than Rs. 10 crore
​ If recipient is non-resident individual/HUF/AOP/BOI/artificial judicial person ​If recipient is non-resident co-operative society/firm​ ​​ ​
​ Nature of payment TDS (inclusive of SC : Nil, EC : 2%, SHEC : 1%) TDS (inclusive of SC : 15%, EC : 2%, SHEC : 1%) TDS (inclusive of SC : 12%, EC : 2%, SHEC : 1%) TDS (inclusive of SC :Nil, EC : 2%, SHEC : 1%) TDS (inclusive of SC : 2%, EC : 2%, SHEC : 1%) TDS (inclusive of SC : 5%, EC : 2%, SHEC : 1%)
• Sec. 192 - Payment of salary [normal tax rates are applicable – SC : 10% (if net income exceeds Rs. 1 crore), EC : 2% and SHEC : 1%] – – – – – –
• Sec. 192A - Payment of taxable accumulated balance of provident fund​ 10.3 11.845​ – – – –
• Sec. 194B - Winnings from lottery or crossword puzzle or card game or other game of any sort 30.9 35.535 34.608 30.9 31.518 32.445
• Sec. 194BB - Winnings from horse races 30.9 35.535 34.608 30.9 31.518 32.445
• Sec. 194E - Payment to a non-resident foreign citizen sportsman/entertainer or non-resident sports association 20.6 23.69 23.072 20.6 21.012 21.63
• Sec. 194EE - Payment in respect of deposits under National Saving Scheme, 1987 20.6 (10.3% from June 1, 2016) 23.69 (11.845% from June 1, 2016)​ 23.072 (11.536% from June 1, 2016)​ NA NA NA
• Sec. 194F - Re-purchase of units of MF or UTI 20.6 23.69 23.072 NA NA NA
• Sec. 194G - Commission on sale of lottery tickets 10.3 (5.15% from June 1, 2016) 11.845 (5.9225% from June 1, 2016) 11.536 (5.768% from June 1, 2016) 10.3 (5.15% from June 1, 2016) 10.506 (5.253% from June 1, 2016) 10.815 (5.4075% from June 1, 2016)
• Sec. 194LB - Payment/credit by way of interest by infrastructure debt fund 5.15 5.9225 5.768 5.15 5.253 5.4075
• Sec. 194LBA(2) - Payment of the nature referred to in ​section 10(23FC) by business trust to unit holders (applicable from October 1, 2014) 5.15 5.9225 5.768 5.15 5.253 5.4075
• Sec. 194LBA(3) - Payment of the nature referred to in ​section 10(23FCA) by business trust to unit holders 30.9 35.535 34.608 41.2 42.024 43.26
• Sec. 194LBB - Payment in respect of units of investment fund specified in section 115UB 10.3 (30.9% from June 1, 2016) 11.845 (35.535% from June 1, 2016) 11.536 (34.608% from June 1, 2016) 10.3 (41.2% from June 1, 2016) 10.506 (42.024% from June 1, 2016) 10.815 (43.26% from June 1, 2016)
• Sec. 194LBC(2) - Payment in respect of an investment in a securitisation trust specified in clause (d) of the Explanation occurring after section 115TCA (with effect from June 1, 2016) 30.9 35.535 34.608 41.2 42.024 43.26
• Sec. 194LC - Payment/credit of interest by an Indian specified company on foreign currency approved loan/long-term infrastructure bonds (with effect from October 1, 2014, any bond) from outside India 5.15 5.9225 5.768 5.15 5.253 5.4075
• Sec. 194LD - Interest on a rupee denominated bond of an Indian company or Government security (from June 1, 2013) 5.15 5.9225 5.768 5.15 5.253 5.4075
• Sec. 195 - Payment/credit of other sum to a non-resident — - - - - - -
a. income of foreign exchange assets payable to an Indian citizen 20.6 23.69 23.072 NA NA NA
b. income by way of long-term capital gains referred to in section 115E or section 112(1)(c)(iii) 10.3 11.845 11.536 10.3 10.506 10.815
c. short-term capital gains under section 111A 15.45 17.7675 17.304 15.45 15.759 16.2225
​ d. any other long-term capital gains [not being covered by ​196D ​section 10(33), 10(36) and 10(38)] 20.6 23.69 23.072 20.6 21.012 21.63
e. income by way of interest payable by Government/Indian concern on money borrowed or debt incurred by Government or Indian concern in foreign currency (not being interest referred to in section 194LB or 194LC or 20.6 23.69 23.072 20.6 21.012 21.63
f. royalty [see Note 5] 10.3 11.845 11.536 10.3 10.506 10.815
g. royalty [not being royalty of the nature referred to in (f) supra] [see Note 6] – - - - - - -
□ where the agreement is made after March 31, 1961 but before April 1, 1976 10.3 10.845 11.536 51.5 52.53 54.075
□ where the agreement is made on or after April 1, 1976 10.3 10.845 11.536 10.3 10.506 10.815
h. fees for technical services [see Note 7] – - - - - - -
□ where the agreement is made after February 29, 1964 but before April 1, 1976 10.3 10.845 11.536 51.5 52.53 54.075
□ where the agreement is made on or after April 1, 1976 10.3 10.845 11.536 10.3 10.506 10.815
i. any other income 30.9 35.535 34.608 41.20 42.024 43.26
• Sec. 196B - Payment/credit of income from units (including long-term capital gains on transfer of such units) to an offshore fund 10.3 10.845 11.536 10.3 10.506 10.815
• Sec. 196C - Payment/credit of interest of foreign currency bonds or GDR (including long-term capital gains on transfer of such bonds) (not being dividend referred to in section 115-O) 10.3 10.845 11.536 10.3 10.506 10.815
• ​Sec. 196D - Payment/credit of income from securities (not being dividend, short-term or long-term capital gain) to Foreign Institutional Investors 20.6 23.69 23.072 20.6 21.012​ 21.63
​

Notes :

1. Under sections 192​ tax is deductible from salary. The payer shall calculate salary taxable in the hands of recipient. The amount so determined is subject to tax deduction under sections 192. Under sections 192A, tax is deductible on taxable accumulated balnce of provident fund. Under section 195, tax is deductible only if income is taxable in the hands of recipient in India. In any other case, gross payment is subject to tax deduction.

2. In Category B, tax is deductible at the above rates or the rates specified in ADT agreements entered into by the Central Government under section 90 (whichever is lower) [ section 2(37A)(iii)].

3. Tax is not deductible under section 192A, section 193, 194, 194A, 194DA, 194-I, or 194EE if the recipient makes a declaration in Form No. 15G/15H under the provisions of section 197A.

4. Under section 197 the recipient can apply the Assessing Officer in Form No. 13 to get a certificate of lower/no tax deduction. This benefit is, however, not available if tax is deductible under section 192A, section 194B, 194BB, 194E, 194EE, 194F, 194-IA, 194LBA, 194LB, 194LC, 196B, 196C or ​196D​.

5. Royalty payable by Government or an Indian concern in pursuance of an agreement made by non-resident with the Government or the Indian concern after March 31, 1976, where such royalty is in consideration for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book on a subject referred to in the first proviso to ​section 115A(1A) to the Indian concern or in respect of computer software referred to in the second proviso to ​section 115A(1A), to a person resident in India.

6. Not being royalty of the nature referred to above, payable by Government or an Indian concern in pursuance of an agreement made by non-resident with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to matter included in the industrial policy, the agreement is in accordance with that policy.

7. Fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by non-resident with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to matter included in the industrial policy, the agreement is in accordance with that policy.​ Source: CoolInterview.com

If you have the better answer, then send it to us. We will display your answer after the approval.

Rules to Post Answers in CoolInterview.com:-

• There should not be any Spelling Mistakes.
• There should not be any Gramatical Errors.
• Answers must not contain any bad words.
• Answers should not be the repeat of same answer, already approved.
• Answer should be complete in itself.

Name :*
Email Id :*
Answer :*
Verification Code	Not readable? Load New Code
Enter the above shown code: *
	Inform me about updated answers to this question