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TDS Rates and Returns

TDS Rate for Payment of Salary and Wages

Section 192Payment of Salary and Wages
Criterion of DeductionTDS 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 RateAs per Income Tax, Surcharge and Education Cess rates applicable on the estimated income of employee for the year.
Section 192APayment of accumulated balance of provident fund which is taxable in the hands of an employee (with effect from 01.06.2015).
TDS Rate10%

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

SectionFor Payment ofOn Payments ExceedingIndividual/
HUF
Others
193Interest on SecuritesRs. 5000/-10%10%
194Dividend other than the dividend as referred to in Section 115-O10%10%
194 AIncome by way of interest other than ‘Interest on securities’Rs. 10000/-10%10%
194 AInterest other than on securities by othersRs. 5000/-10%10%
194 BWinnings from Lotteries / Puzzle / GameRs. 10000/-30%30%
194 BBWinnings from Horse RaceRs. 5000/-30%30%
194 C (1)Payment to ContractorsRs. 30000/- for single paymentRs. 75000/- for aggregate
payment during Financial Year
1%2%
194 C (2)Payment to Sub-Contractors / for Advertisements
194 DPayment of Insurance CommissionRs. 20000/-10%10%
194 EEPayment of NSS DepositsRs. 2500/-20%NA
194 FRepurchase of units by Mutual Funds / UTIRs. 1000/-20%20%
194 GCommission on Sale of Lottery ticketsRs. 1000/-10%10%
194 HCommission or BrokerageRs. 5000/-10%10%
194 IRent of Land, Building or FurnitureRs. 180000/-10%10%
Rent of Plant & MachineryRs. 180000/-2%2%
194 IATransfer of Immovable Property (w.e.f. 01.06.2013)Rs. 50 lacs1%1%
194 JProfessional / technical services, royaltyRs. 30000/-10%10%
194 J (1)Remuneration / commission to director of the company10%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 LCompensation on acquisition of Capital AssetRs. 100000/-10%10%
194 LACompensation on acquisition of certain immovable propertyRs. 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

QuarterSalary PaymentsOther Payment
April to February7th of next month7th of next month
March30th April30th 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 endingDue date,if deductor is an office of the GovernmentDue Date for others
30th June31st July of the financial year15th July of the financial year
30th September31st October of the financial year15th October of the financial year
31st December31st January of the financial year15th January of the financial year
31st March15th May of the financial year immediately following the financial year in which deduction is made15th 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 234EFailure to TDS return in timeFine 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.
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