Tax Deducted At Source (TDS)
The general rule is that the total income of an assessee for the previous year is taxable in the relevant assessment year. However, income-tax is recovered from the assessee in the previous year itself by way of TDS. The relevant provisions therein are listed below. (To be used for reference only. The detailed provisions therein are not listed below.1)
| Section | Nature of payment | Threshold limit (up to which no tax is deductible) | TDS to be deducted |
|---|---|---|---|
| 192 | Salary to any person | Exemption limit | As specified for individual in Part III of I Schedule |
| 193 2 | Interest on securities to any resident | Subject to detailed provisions of given section | 10% |
| 194A 2 | Interest (other than interest on securities) to any resident | Rs. 10000 (for Bank/cooperative bank) & Rs. 5000 otherwise | 10% |
| 194B | Winning from lotteries etc. to any person | Rs. 10000 | 30% |
| 194BB | Winning from horse races to any person | Rs. 5000 | 30% |
| 194C 2 | Payment to resident contractors | Rs. 30000 (for single contract) & Rs. 75000 (for aggregate consideration in a financial year) | 2% (for companies/firms) & 1% otherwise |
| 194D | Insurance commission to resident | Rs. 20000 | 10% |
| 194E | Payment to non-resident sportsmen or sports association | Not applicable | 10% |
| 194EE | Payment of deposit under National Savings Scheme to any person | Rs. 2500 | 20% |
| 194G | Commission on sale of lottery tickets to any person | Rs. 1000 | 10% |
| 194H 2 | Commission/brokerage to a resident | Rs. 5000 | 10% |
| 194-I 2 | Rents paid to any resident | Rs. 180000 | 2% (for plant,machinery,equipment) & 10% (for land,building,furniture) |
| 194J 2 | Fees for professional/technical services; Royalty | Rs. 30000 | 10% |
| 194LB | Interest paid by Infrastructure Development Fund under section 10(47) to non-resident or foreign company | - | 5% |
| 195 | Interest or other sums (not being salary) paid to non-residents or foreign company except under section 115O | - | As per double taxation avoidance treaty |
^1 At what time tax has to be deducted at source and some other specifications are subject to the above sections.
^2 In most cases, these payments shall not to deducted by an individual or an HUF if books of accounts are not required to be audited in the immediately preceding financial year.
In most cases, the tax deducted should be deposited within 7 days from the end of the month in which tax was deducted.
Read more about this topic: Income Tax In India
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