TDS is to be deducted on payment made as prescribed by Income Tax Act by persons who are liable to deduct TDS. It is the duty of the deductor to deduct TDS as given in Income Tax Act. Adding this year an amendment in section 119(2) to include levy of penalty under section 271C or 271CA w.e.f  1st June, 2017.

Following are the revised rate of TDS applicable for Financial Year 2017-18 Assessment Year 2018-19.

Tax Deducted at Source TDS Rate for FY 2017 with rates applicable in FY 2016

Nature of Payment

Basic Cutoff (Rs.)

Individuals and HUF

(Rate %)

Company / Firm / LLP / Cop Society / Local Authority

(Rate %)

If No Pan or Invalid PAN

(Rate %)

192 – Salaries

Slab Rate

Slab Rates

Slab Rates

30

192A-Premature withdrawal from Employee Provident Fund ( Limit wef 01 June 2016)

50000

NA

10

20

193 - Interest on securities

-

10

10

20

194 - Dividend other than the dividend as referred to in Section 115-O

2500

10

10

20

194A - Interest other than interest on securities - Others

5000

10

10

20

194A - Banks(Time deposits)

10000

10

10

20

194A - Banks (Recurring deposit)

10000

10

10

20

194A - Deposit in Co-op Banks

10000

10

10

20

194B - Winning from Lotteries

10000

30

30

30

194BB - Winnings from Horse Race ( Limit wef 01 June 2016)

10000

30

30

30

194C- Payment to Contractor - Single Transaction

30000

1

2

20

194C-Payment to Contractor - Aggregate During the Financial year ( Limit wef 01 June 2016)

100000

1

2

20

194C- Contract - Transporter not covered under 44AE (wef 01 June 2015)

30000 / 75000

1

2

20

194C- Contract - Transporter covered under 44AE & submit declaration on prescribed form with PAN (wef 01 June 2015)

-

-

-

20

194D - Insurance Commission

15000

 

5 (New),10 (Old)

5 (New),10 (Old)

20

194DA Payment in respect of life insurance policy  (Percentage w.e.f. 01 June 2016)

100000

1

1

20

194E - Payment to Non-Resident Sportsmen or Sports Association

-

20

20

20

194EE - Payments out of deposits under NSS (Percentage w.e.f. 01 June 2016)

2500

10

10

20

194F - Repurchase Units by MFs

-

20

20

20

194G - Commission – Lottery (Percentage  and Limit w.e.f. 01 June 2016)

15000

5

5

20

194H - Commission / Brokerage (Percentage  and Limit w.e.f. 01 June 2016)

15000

5

5

20

194I - Rent - Land and Building - furniture - fittings

180000

Not applicable(new)

10(old)

10

20

194I - Rent - Plant / Machinery / equipment

180000

2

2

20

194IA -Transfer of certain immovable property other than agriculture land

5000000

1

1

20

194IB – Rent – Land or building or both (new provision w.e.f 1st june 217)

50000 per moth

5

-

20

194J - Professional Fees for businesses except call centres.

30000

10(old)

10(old)

20

194J - Professional Fees (New Rate w.e.f 1st June, 2017) for call centre business

30000

2(new)

2(new)

20

194LA - Immovable Property (Percentage  and Limit w.e.f. 01 June 2016)

0 (New)

200000 (old)

0 (new)

10 (old)

0 (new)

10 (old)

20

194LB - Income by way of interest from infrastructure debt fund (non-resident)

-

5

5

20

194LBB - Income in respect of investment in Securitisation trust. (New Section)

-

25

30

20

Sec 194 LC - Income by way of interest by an Indian specified company to a non-resident / foreign company on foreign currency approved loan / long-term infrastructure bonds from outside India

-

5

5

20

194LD - Interest on certain bonds and govt. Securities

-

5

5

20

196B - Income from units

-

10

10

20

196C-Income from foreign currency bonds or GDR (including long-term capital gains on transfer of such bonds) (not being dividend)

-

10

10

20

196D - Income of FIIs from securities

-

20

20

20

 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

 

Due dates for TDS quarterly Returns

Quarter

Period

Due Date

Q1

1 Apr - 30 June

15th July

Q2

1 July - 30 Sept

15th Oct

Q3

1 Oct - 31 Dec

15th Jan

Q4

1 Jan - 31 Mar

15th May

Notes and Important points to be kept in Mind

TDS is not applicable on service tax part if service tax is shown separately

TCS (Tax Collection at Source)  : Tax to be collected at source at the rate of 1 % on purchase of luxury cars exceeding value of Rs. 10 lakh and purchase of goods and services in cash exceeding Rs. 2 lakh.

TDS (Tax Deduction at Source):6% withholding tax to be deducted from the payment to a foreign company with no permanent establishment, for online advertisement. Ceiling limit for this purpose will be Rs. 1 Lakh. Levy will only apply to Business to Business Transactions.

All Individuals and HUFs who are not covered under section 44AB will have to deduct tax at source on payment of rent for use of land or building or both under section 194-IB w.e.f  1st June, 2017. Tax shall be deducted at the time of credit of rent for last month of the previous year. The deductor of TDS on such rent is not required to obtain Tax Deduction Number (TAN). However the TDS shall not exceed the rent payable of the last month of previous year.

Amendments in section 194J provides concessional rate of 2% only in case of payees engaged only in the business of operation of call centre, rest all the other payees engaged in some other business are required to deduct tax at the old rate ie. 10%.

Section 194LA has amended to provide that no tds is required to be deducted in case compensation is paid pursuant to award or agreement under section 96 of Right to Fair Compensation and Transperency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

Section 194LC provides rate of 5% on interest on such specified bonds till 1st June 2020.

Rate of 5% under section 194LD is extended upto 1st July 2020.

Deduction at lower or nil rate requires certificate u/s.197,which will take effect from the day it is issued. It cannot be used retrospectively.

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

Failure to file quarterly TDS Returns in time- late fee @ Rs. 200/- per day (maximum of TDS amount) Section 234E

For any query you can write to Chirag@cachauhan.in . Before making any decisions do consult your Professional / tax advisor.  Author does not take any responsibility for misrepresentation or interpretation of act or rules. Neither the author nor the firm accepts any liability neither for the loss or damage of any kind arising out of information in this document nor for any action taken in reliance there on

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