07/03/2017
TDS Rates Chart for Financial Year 2017-18/ Assessment Year 2018-19 vide Finance Act 2017 i.e Budget 2017-18. We have updated the TDS rate chart considering the amendments made by Finance Act, 2017.
Tax Deducted at Source (TDS) Rate Chart/Slab for Financial Year (FY) 2017-18 / Assessment Year (AY) 2018-19
| Section | Nature of income | When to deduct | Rate of TDS |
| 192 | Salary | Monthly- at the time of payment where estimated yearly net taxable salary exceeds tax free limit. | On the average rates on the basis of per rates for individuals. (30% if no Valid PAN) |
| 192A | Payment of accumulated balance due of Employees’ Provident Fund Scheme, 1952, to Employess which is taxable in their hand
(w.e.f 01-06-15) | when the amount of
payment or aggregate amount of payment exceeds Rs. 30,000/-Threshold Limit Increased to Rs. 50,000/- from 01.06.2016 | 10% (30% if no Valid PAN) |
193 (See
note- 1 )* | 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; b) any debentures issued by a company where such debentures are listed on a recognised stock exchange in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and any rules made thereunder; c) any security of the Central or State Government; d) interest on any other security | At the time of credit or payment, whichever is
earlier, when the
amount exceeds Rs.
10,000/-In case of Debentures Threshold limit is Rs. 5000/- | 10% (20% if no Valid PAN) |
| 194 | Dividend other than the dividend as referred to in Section 115O | Before making payment
to’ shareholder, other
than dividend declared
U/s. 115O, when
amount exceeds Rs.
2,500/- | 10% (20% if no Valid PAN) |
194A
(See
note- 2 to 5)* | Interest other than
“Interest on securities” | At the time of credit or payment, whichever is
earlier, when the
amount exceeds Rs.
5,000/-. However, limit is Rs. 10,000/- in case of interest credited by banks including co-operative banks to its members. | 10% (20% if no Valid PAN) |
| 194B /194BB | Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort and Income by way of winnings from horse races | Winning from Lotteries 5000 (1-April-2016 to 31-May-2016) 10000 (On or after 1-Jun-2016) HORSE RACE 5000 (1-April-2016 to 31-May-2016) 10000 (On or after 1-Jun-2016 ) | 30% (30% if no Valid PAN) |
194C (See
note- 6)* | Payment to
contractors/ sub-
contractors | At the time of credit or payment, whichever is earlier, when the amount of a particular contract exceeds Rs. 30,000/- or the total
amount of contract
during the whole year exceeds Rs. 75,000/- (Increased to Rs. 1 Lakh wef 01.06.2016) | 2% – For payments to
contractor/Sub-contractor
who is not an
Individual/HUF(20% if no Valid PAN) |
1% – For payment to
contractor/Sub-contractor
who is an Individual/HUF(20% if no Valid PAN) |
| 194D | Insurance Commission | At the time of credit or payment, whichever is earlier when the amount exceeds Rs. 20000 (1-April-2016 to 31-May-2016) or Rs. 15000 (On or after 1-June-2016 ) | 10% from 01.04.2016 to 31.05.2016 5% wef 01.06.2016) (20% if no Valid PAN) (Please refer Note |
| 194DA | Payment under life
insurance policy
(including Bonus) | At the time of payment when the amount or the total amount during the whole year exceeds Rs. 1 ,00,000/- | 2% (1% wef 01.06.2016) (20% if no Valid PAN) |
| 194E | Payment to Non-Resident Sportsmen or Sports Association | At the time of credit or payment, whichever is earlier | 20% (20% if no Valid PAN) |
| 194EE | Payment in respect of deposit under National Savings scheme (NSS) | At the time of credit or payment, whichever is earlier when the amount exceeds Rs. 2500/- | 20% (1-April-2016 to 31-May-2016) 10% (on or after 1-Jun-2016) (20% if no Valid PAN) |
| 194F | Payment on account of repurchase of unit by Mutual Fund or Unit Trust of India | At the time of credit or payment, whichever is earlier | 20% (20% if no Valid PAN) |
| 194G | Commission on sale of lottery tickets | At the time of credit or payment, whichever is earlier when the amount exceeds Rs. 1,000/- (1-April-2016 to 31-May-2016) or Rs. 15000 wef. 1stJune-2016 | 10% from 01.04.2016 to 31.05.2016 5% wef 01.06.2016 (20% if no Valid PAN) |
| 194H | Payment of commission
brokerage | At the time of credit or payment whichever is earlier when the amount exceeds Rs. 5000/- (Rs. 15000 WEF 1-June-2016) | 10% from 01.04.2016 to 31.05.2016 5% wef 01.06.2016 (20% if no Valid PAN) |
| 194I (See note-7) | Rent | At the time of credit or payment, whichever is earlier, when the amount exceeds Rs. 1,80,000/- | 10% – If rent is for land,
building or furniture(20% if no Valid PAN) |
2% – If the rent is for
Machinery, Plant or
Equipment(20% if no Valid PAN) |
| 194IA ((See note-8) | Payment on transfer of certain immovable property other than agriculture land. | At the time of credit or payment, whichever is earlier, when the land is situated in specified
area when amount exceeds Rs. 50 lacs | 1% (20% if no Valid PAN) |
| 194IB | Rent payable by an individual or HUF not covered u/s. 194I (W.E.F. from 01.06.2017) | Tax shall be deducted on such income at the time of credit of rent, for the last month of the previous year or the last month of tenancy if the property is vacated during the year, as the case may be, to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier. | Threshold limit Rs. 50,000/- per month. TDS to be deducted @ 5% Read- |
| 194IC | Payment of Consideration (not being in kind) under Joint Development Agreement or other similar agreement | At the time of credit or payment, whichever is earlier. | Threshold limit Rs. Nil TDS to be deducted @ 10% (Applicable from 01.04.2017) Read- Budget 2017-Changes in capital gain computation- joint development agreement |
| 194J | Any sum paid by way of a) Fee for professional services, b) Fee for technical services c) Royalty, d) Remuneration/fee/commission to a director or e) For not carrying out any activity in relation to any business f) For not sharing any know-how, patent, copyright etc. | At the time of credit or payment, whichever is earlier, when the amount exceeds Rs. 30,000/- | 10% 2% in case of payments received or credited to a payee, being a person engaged only in the business of operation of call center wef 01.06.2017. (20% if no Valid PAN) Read- S.194J TDS rate proposed at 2% on Call Center business Income |
| 194K | Income in respect of Units | Omitted w.e.f 01.06.2016 as Section was non-operational. |
| 194L | Payment of Compensation on acquisition of Capital Asset | Omitted w.e.f 01.06.2016 as Section was non-operational |
| 194LA | Payment on transfer of certain immovable property other than agricultural land (Read Note-8) | At the time of credit or payment whichever is earlier if amount exceeds Rs. 200000 between 1-April-2016 to 31-May-2016 or Rs. 250000 after 1-June-2016 | 10% (20% if no Valid PAN) |
| 194LB | Payment of interest on infrastructure debt fund to non-resident or foreign company | At the time of credit or payment whichever is earlier | 5%# (20% if no Valid PAN) |
| Sec 194LBC | Income in respect of investment in securitisation trust. (From 01.06.2016) | 25% For Residents individual or HUFs and 30% For other Residents 40% For Non Residents Companies and 30% For Non Residents other than Company | |
| 194LBA | Certain income from units of a business trust(applicable from 01.10.2014 | At the time of credit or payment whichever is earlier | 10% # (20% if no Valid PAN) |
| 194LBA | 194LBA – Certain income from units of a business trust to non-resident (applicable from 01.10.2014) | At the time of credit or payment whichever is earlier | 5%# (20% if no Valid PAN) |
| 194LBB (See note-10) | Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)] shall deduct tax therefrom (with effect from 01.06.2015). | At the time of credit or payment whichever is earlier | 10% from 1-April-2016 to 31-May-2016 40% For Non Residents (1-Jun-2016 to 31-Mar-2017) 30 % For Non Residents (on or after 1-Jun-2016 ) (20% or Rate Applicable whichever is higher if no Valid PAN) |
| 194LC | Payment of interest by an Indian Company or a business trust in respect of money borrowed in foreign currency under a loan agreement or by way of issue of long-term bonds (including long-term infrastructure bond) | At the time of credit or payment whichever is earlier | 5%# Concessional rate of five per cent TDS on interest
payment under this section will now be available in respect of borrowings made before the 1st July, 2020. Read- Extension of period of concessional tax rate on interest on ECB |
| 194LD (See note-9) | Payment of interest on rupee denominated bond of an Indian Company or Government securities to a Foreign Institutional Investor or a Qualified Foreign Investor | At the time of credit or payment whichever is earlier | 5%# |
| 195 | Other Sums | At the time of credit or payment whichever is earlier | Average rates as applicable (See Note 17 & 18) |
| 196A | Foreign comp unit holder of MF | At the time of credit or payment whichever is earlier | 10 % In case of a Company 20% In the case of a person other than a company |
| 196B – | Income from units (including long-term capital gain on transfer of such units) to an offshore fund | At the time of credit or payment whichever is earlier | 10% (20% if no Valid PAN) |
| 196C | Income from foreign currency bonds or GDR (including long-term capital gains on transfer of such bonds) (not being dividend) | At the time of credit or payment whichever is earlier | 10% (20% if no Valid PAN) |
| 196D | Income of FIIs from securities | At the time of credit or payment whichever is earlier | 20% (20% if no Valid PAN) |
# Surcharge, education cess and secondary and higher education cess will be added to the above tax rate, as applicable.
Notes:
1. Securities includes listed as well as unlisted debentures issued by companies in which public are substantially interested.
2. In case of interest payment on time deposits by co-operative banks to its members the TDS Provision is applicable from 1-6-2015.
3. TDS provisions under Section 194A shall not apply to income paid by way of interest on the compensation amount awarded by the Motor Accidents Claims Tribunal where the amount of such income does not exceed Rs. 50000/- and further TDS on interest payment on compensation amount awarded by Motor Accident Claim Tribunal is deductible at the time of payment instead of accrual (WEF 01.06.2015)- Section 194A- Amendment in provisions related to TDS on interest
4. As per amended definition of ‘time deposits’ under section 194(3) it now includes include recurring deposits also. This implies that now, interest on recurring deposits is also subject to TDS.
5. Bankwise Income to be considered for TDS deduction on time deposits instead of Branch- Section 194A- Amendment in provisions related to TDS on interest
6. a) From 01.06.2015 – If the payment is made to contractor/sub contractor in transport business, no TDS shall be deducted at source in the course of payment for plying, hiring or leasing goods carriages if the contractor provides PAN Number and such contractor owns ten or less goods carriage at any time during the previous year and furnishes a declaration to that effect. (WEF 01.06.2015)- TDS deductible on Payment to Transporters owing more than 10 goods carriage
b) Up to 31.05.2015– No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages on furnishing of his Permanent Account Number, to the person paying or crediting such sum.
7. No TDS deduction shall be made under section 194-I of the Act where the income by way of rent is credited or paid to a business trust, being a real estate investment trust (REIT), in respect of any real estate asset held directly by such REIT. (wef 01-04-2015) – Read More-Tax Regime for Real Estate Investment Trusts and Infrastructure Investment Trusts
8. In case of section 194LA, the sub-registrar shall register the document only after the challan for payment of TDS is presented before him.
It is proposed to amend the section 194LA to provide that no deduction shall be made under this section where such payment is made in respect of any award or agreement which has been exempted from levy of income-tax under section 96 (except those made under section 46) of RFCTLARR Act. This amendment will take effect from 1st April, 2017. No tax deduction on compensation under RFCTLAAR Act, 2013
9. Concessional rate of 5% withholding tax on interest payment under section 194LD will now be available on interest payable before the 1st July, 2020.- Extension of eligible period of concessional tax rate U/s. 194LD
10. TDS on Income in respect of units of investment fund- New section 194LBB to provide for TDS @ 10% on payments to a unit holder in respect of units of Investment Fund u/s 115UB – Pass through status to Category –I and II Alternative Investment Funds
11. Section 195 has been amended to provide furnishing of information in Form 15CA and 15CB for payments to a non resident/foreign company irrespective to the fact that whether or not those payments were chargeable under Income tax Act. (wef 01-06-2015) – Rationalisation of provisions relating to TDS and TCS
12. If the payment is made to a person (including non resident) whose receipts are subject to TDS shall mandatory furnish his PAN to the deductor (even though the deductee file a declaration in form no. 15G or 15H) otherwise the deductor shall deduct the TDS at higher of the following rates-
– The applicable rate prescribed in the Act or
– The rate mentioned in the Finance Act or
– 20%
13. Surcharge on TDS on payments made to non-resident person and company other than a domestic company
a) Surcharge Rate (%)
| Non Residents other than company (if income exceeds Rs. 50 Lakh but not exceeds Rs. 1 Crore) | 10% |
| Non Residents other than company (if income exceeds Rs. 1 Crore) | 15% |
| Non Resident companies if income is between Rs. 1 Crore and 10 Crore | 2% |
| Non Resident companies if income is greater than Rs. 10 Crore | 5% |
| Surcharge on Coperative Society & Firms in case of Non-Residents (if income exceeds Rs. 1 crore) | 12% |
b) Surcharge on tax is not deductible/collectible at source in case of resident individual/ HUF /Firm/LLP/ AOP / BOI/Domestic Company in respect of payment of income other than salary.
14. Education Cess on payments made to non-resident person and company other than a domestic company
a) Non Resident & Foreign Companies– “Education Cess on income-tax” and “Secondary and Higher Education Cess on income-tax” shall continue to be levied at the rate of two per cent. and one per cent. respectively, of income tax including surcharge wherever applicable.
b) Other Resident Assessees- Education Cess is not deductible/collectible at source in case of resident Individual/HUF/Firm/ AOP/ BOI/ Domestic Company in respect of payment of income other than salary.Education Cess @ 2% plus secondary & Higher Education Cess @ 1% is deductible at source in case of non-residents and foreign company.
15. NO TDS on service tax component comprised in the payments made to residents – Circular No. 1/2014 , Dated 13-1-2014
16. Amendment in TDS Rates & Threshold limit wef 01.06.2016
17. Deduction under Section 195 of Income Tax Act, 1961, In the case of a person other than a company who is not resident in India-
| Section 195: Payment of any other sum to a Non-resident | TDS Rate |
| a) Income in respect of investment made by a Non-resident Indian Citizen | 20 |
| b) Income by way of long-term capital gains referred to in Section 115E in case of a Non-resident Indian Citizen | 10 |
| c) Income by way of long-term capital gains referred to in sub-clause (iii) of clause (c) of sub-Section (1) of Section 112 | 10 |
| d) Income by way of short-term capital gains referred to in Section 111A | 15 |
| e) Any other income by way of long-term capital gains [not being long-term capital gains referred to in clauses (33), (36) and (38) of Section 10] | 20 |
| f) Income by way of interest payable by Government or an Indian concern on moneys borrowed or debt incurred by Government or the Indian concern in foreign currency (not being income by way of interest referred to in Section 194LB or Section 194LC) | 5 |
| g) Income by way of royalty payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern 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 sub-section (1A) of Section 115A of the Income-tax Act, to the Indian concern, or in respect of any computer software referred to in the second proviso to sub-section (1A) of Section 115A of the Income-tax Act, to a person resident in India | 10 |
| h) Income by way of royalty [not being royalty of the nature referred to point g) above E] payable by Government or an Indian concern in pursuance of an agreement made by it 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 a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy | 10 |
| i) Income by way of fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by it 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 a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy | 10 |
| j) Any other income | 30 |
18. Deduction under Section 195 of Income Tax Act, 1961, where the company is not a domestic company-
| Section 195: Payment of any other sum | TDS Rate |
| a) Income by way of long-term capital gains referred to in sub-clause (iii) of clause (c) of sub-section (1) of Section 112 | 10 |
| b) Income by way of short-term capital gains referred to in Section 111A | 15 |
| c) Any other income by way of long-term capital gains [not being long-term capital gains referred to in clauses (33), (36) and (38) of Section 10] | 20 |
| d) Income by way of interest payable by Government or an Indian concern on moneys borrowed or debt incurred by Government or the Indian concern in foreign currency (not being income by way of interest referred to in Section 194LB or Section 194LC) | 20 |
| e) Income by way of royalty payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March, 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 sub-section (1A) of Section 115A of the Income-tax Act, to the Indian concern, or in respect of any computer software referred to in the second proviso to sub-section (1A) of Section 115A of the Income-tax Act, to a person resident in India | 10 |
| f) Income by way of royalty [not being royalty of the nature referred to in point e) above C] payable by Government or an Indian concern in pursuance of an agreement made by it 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 a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy— | |
| A. where the agreement is made after the 31st day of March, 1961 but before the 1st day of April, 1976 | 50 |
| B. where the agreement is made after the 31st day of March, 1976 | 10 |
| g) Income by way of fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by it 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 a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy— | |
| A. where the agreement is made after the 29th day of February, 1964 but before the 1st day of April, 1976 | 50 |
| B. where the agreement is made after the 31st day of March, 1976 | 10 |
| h) Any other income | 4 |
19. In order to reduce compliance burden in the case of Individuals and HUFs, it is proposed to amend section 197A so as to make them eligible for filing self-declaration in Form.No.15G/15H for non-deduction of tax at source in respect insurance commission referred to in section 194D. This amendment will take effect from 1st June, 2017. Read- Budget 2017: No TDS deduction on Insurance Commission on Filing of Form 15G/15H
20. Upon self-certification, no tax will be deducted on rental payments if the income of the payee does not exceed the maximum amount not chargeable to tax subject to provisions of section 194IB.
21. An Individual or a Hindu Undivided Family whose total sales , gross receipts or turnover from business or profession carried on by him exceeds the monetary limits under Sec.44AB during the preceding financial year shall also be liable to deduct tax
22. Section 206AA of the Income-tax Act so as to provide that TDS shall not be deducted at a higher rate in case of non-residents not having PAN, subject to prescribed condition.
23. Deduction at lower or nil rate requires certificate u/s.197,which will take effect from the day it is issued. It cannot 24. Interest and penalty will be applicable as per section 201 and section 271c. Imprisonment can be in cases of continuous failure ranging from 3 months to 7 years
25. Failure to file quarterly TDS Returns in time- late fee @ Rs. 200/- per day (maximum of TDS amount) Section 234E.
26. Due dates for deposit of TDS are as under
| Deductions made in the month of March | On or before 30th April |
| Deductions made other than month of March and tax on perquisites opted to be deposited by employer | On or before seven days from the close of the month |
27. Due dates for TDS quarterly Returns
| Due dates for TDS quarterly Returns |
| Quarter | Period | Due Date |
| Q1 | 1 Apr – 30 June | 31st July |
| Q2 | 1 July – 30 Sept | 31st Oct |
| Q3 | 1 Oct – 31 Dec | 31st Jan |
| Q4 | 1 Jan – 31 Mar | 31st May |
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About the author
vijay rai
ACCOUNTS AND TAX CONSULTANTS
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