TDS Rate for Payment of Salary and Wages

Section 192	Payment of Salary and Wages
Criterion of Deduction	TDS is deducted if the estimated income of the employee is taxable.Employer must not deduct tax on non-taxable allowances like conveyance allowance, rent allowance, medical allowance and deductible investments under sections like 80C, 80CC, 80D, 80DD, 80DDB, 80E, 80GG and 80U. No tax is required to be deducted at source if the estimated total income of the employee is less than the minimum taxable income (Rs. 2,50,000/- in case of Individual, HUF, AOP, BOD and AJP. Nil for others.)
TDS Rate	As per Income Tax, Surcharge and Education Cess rates applicable on the estimated income of employee for the year.
Section 192A	Payment of accumulated balance of provident fund which is taxable in the hands of an employee (with effect from 01.06.2015).
TDS Rate	10%

TDS Rates for Payments other than Salary and Wages to Residents (including domestic companies)

Section	For Payment of	On Payments Exceeding	Individual/ HUF	Others
193	Interest on Securites	Rs. 5000/-	10%	10%
194	Dividend other than the dividend as referred to in Section 115-O	–	10%	10%
194 A	Income by way of interest other than ‘Interest on securities’	Rs. 10000/-	10%	10%
194 A	Interest other than on securities by others	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/- for single paymentRs. 75000/- for aggregate payment during Financial Year	1%	2%
194 C (2)	Payment to Sub-Contractors / for Advertisements
194 D	Payment of Insurance Commission	Rs. 20000/-	10%	10%
194 EE	Payment of NSS Deposits	Rs. 2500/-	20%	NA
194 F	Repurchase of units by Mutual Funds / UTI	Rs. 1000/-	20%	20%
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%
	Rent of Plant & Machinery	Rs. 180000/-	2%	2%
194 IA	Transfer of Immovable Property (w.e.f. 01.06.2013)	Rs. 50 lacs	1%	1%
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)	Any remuneration / fees / commission paid to a director of a company, other than those on which tax is deductible u/s 192.	–	10%	10%
194 L	Compensation on acquisition of Capital Asset	Rs. 100000/-	10%	10%
194 LA	Compensation on acquisition of certain immovable property	Rs. 200000/-	10%	10%

Notes:

1. No surcharge or education cess is deductible / collectible at source on payments made to residents {Individuals / HUF / Society / AOP / Firm / Domestic Company) on payment of incomes other than salary or wages.
2. TDS at higher rate of 20% or TDS rate, whichever is higher, has to be deducted if the deductee does not provide PAN to the deductor.(section 206AA)

All persons who are required to deduct tax at source or collect tax at source on behalf of Income Tax Department are required to apply for and obtain Tax Deduction or Tax Collection Account Number (TAN).

Point of Deduction of TDS

Salary :At the time of payment

Other Payments :When income paid or credited including credit to “Payable” or “Suspense” account.

Consequences of failure to deduct tax:
Interest – 1% of the tax deductible.
Penalty – equal to the amount of tax deductible but not deducted.

Due Dates for depositing TDS

Quarter	Salary Payments	Other Payment
April to February	7th of next month	7th of next month
March	30th April	30th April

Consequences of default :

Interest @ 1.5% of tax not deposited is payable u/s 201(A).

Punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years and with fine under Section 276(B).

Issue of TDS Certificate

1. Section 192 (TDS on Salary) :

The certificate on Form No. 16 should be issued by the deductor by 31st day of May of the financial year immediately following the financial year in which the income was paid and tax deducted.

2. In all other cases :

The certificate on Form No. 16A should be issued within fifteen days from the due date for furnishing the “statement of TDS” under rule 31A.

Penalty on Failure to Issue TDS Certificate: Rs. 100/- every day for the period failure continues subject to a maximum of TDS amount.

Forms for submitting Quarterly Statements of Tax Deducted at Source (Rule 31A)

(a) Statement of deduction of tax under section 192 in Form No. 24Q

(b) Statement of deduction of tax under sections 193 to 196D in :

1. Form No. 27Q in respect of the deductee who is a non-resident not being a company or a foreign company or resident but not ordinarily resident; and
2. Form No. 26Q in respect of all other deductees.

Due Dates for submitting Quarterly Statements of Tax Deducted at Source (Rule 31A)

Quarter ending	Due date,if deductor is an office of the Government	Due Date for others
30th June	31st July of the financial year	15th July of the financial year
30th September	31st October of the financial year	15th October of the financial year
31st December	31st January of the financial year	15th January of the financial year
31st March	15th May of the financial year immediately following the financial year in which deduction is made	15th May of the financial year immediately following the financial year in which deduction is made.

Penal Provisions for failure / default in submitting returns /statements
Section 272A(2)	Failure to submit returns prescribed under Section 200(3)	Penalty of Rs. 100/- every day during which the failure continues upto a maximum of TDS amount.
Section 234E	Failure to TDS return in time	Fine of Rs. 200/- every day during which the failure continues will be levied on deductor as long as the default continues, subject to a maximum of TDS amount.
Section 271H	(i) If deductor defaults for more than 1 year in filing TDS Statement(ii) If deductor furnishes incorrect details like PAN, TDS amount, Challan particulars etc.	Penalty which shall not be less than ten thousand rupees but which may extend to one lakh rupees.