The concept of TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) was introduced with the aim to collect tax from the very source of income. Finance Minister confirms TDS Rates and TCS rates applicable for the coming Financial year in every Budget. Let’s take a look at the latest TCS & TDS Rate chart.
TDS for Resident Individuals and Businesses
As per the TDS concept, a person (deductor) who is liable to make a payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government. The deductee from whose income, tax has been deducted at source, would be entitled to get the credit of the amount so deducted on the basis of Form 26AS or the certificate issued by the deductor.
The TDS Payments can be divided into 3 sections as TDS on:
- Salary Payments
- Non-Salary Payments.
- Applicable to Non-Residents
TDS on Salary Payments
As per Section 192 of the Income-tax Act, the employer needs to deduct TDS on salary payments. Employer/Deductor needs to deposit TDS deducted on salary before the 7th of the next month (30th April for the month of March). The employer has to file TDS Return in FORM 24Q.
TDS on Non-Salary Payments
TDS on payments other than Salary depends upon the nature of Payment. Some common payments which feature the TDS system of taxation include commission, FD interest, rent, etc. TDS on different payments and their applicable rates are notified by the Income Tax Act, of 1961. For payments other than salary deductor has to file TDS Return Form 26Q.
Latest TDS Rate Chart
Given below are the TDS rates for Individuals and Businesses:
|Section||Nature of Payment||Threshold Limit (INR)||TDS Rate Chart|
|192||Salary||Basic exemption limit of employee||Normal Slab Rates for FY 2023-24 (AY 2024-25)|
|192A||Premature Withdrawal from EPF||50,000||10% in case of availability of PAN|
20% in case of unavailability of PAN
|193||Interest on Securities||2,500||10%|
|194||Payment of Dividend||5,000||10%|
|194A||Interest from deposits with banks/post office/co-operative society)||(a) Senior Citizen- 50,000|
(b) Others- 40,000
|194A||Interest other than “Interest on Securities” (Other than Interest from deposits with banks/post office/co-operative society)||5,000||10%|
|194B||Winning from lotteries, cross-word, puzzles, card games, etc.||10,000||30%|
|194BA||Winnings from online games||No Limit||30%|
|194BB||Winning from Horse Race||10,000||30%|
|194C||Payment to Contractor||(a)Individuals/HUFs- 1%|
|194D||Insurance Commission||15,000||(a) Individuals- 5%|
(b) Companies- 10%
|194DA||Payment in respect of life insurance policy||1,00,000||5%|
|194E||Payment to Non-resident sportsmen or association||No limit||20% + Cess|
|194EE||Payment in respect of deposit under the National Saving Scheme||2500||10%|
|194F||Payments on account of re-purchase of units by Mutual fund or UTI||No limit||20%|
|194G||Commission, prize, etc. on sale of tickets||15,000||5%|
|194H||Commission or Brokerage||15,000||5%|
|194-I(a)||Rent for Plant & Machinery||2,40,000||2%|
|194-I(b)||Rent for Immovable Property (Land/building or Furniture/fitting)||2,40,000||10%|
|194-IA||Payment for acquisition of Immovable property||50,00,000||1% (TDS is to be deducted at the rate of 1% of such sum paid or credited to the resident or the stamp duty value of such property, whichever is higher.)|
|194-IB||Payment of Rent by individual/HUF not liable for audit||50,000 per month||5%|
|194-IC||Payment for monetary consideration under Joint Development Agreement||No limit||10%|
|194J||Fee for Professional or Technical Services (FTS), Royalty, etc.||30,000||2% ( Fees for technical services, certain Royalties, call center) 10%- Others|
|194K||Payment of Dividends by Mutual funds||5,000||10%|
|194LA||Payment of compensation on acquisition of Immovable property||2,50,000||10%|
|194LB||Interest from Infrastructure Bond to NRI||No limit||5%|
|194LBB||Payment of income by Investment fund||No limit||10%|
|194LBC||Income by Securitization fund||No limit||(a) Individuals/HUFs- 25%|
(b) Others- 30%
|194M||Payment of Commission, Brokerage, or Fees for Professional Service by Individual or HUF( other than covered u/s 194C, 194H,194J)||50,00,000||5%|
|194N||Cash withdrawal exceeding a certain limit||(a) 1 crore||2%|
|(b) Exceeding Rs. 20 lakhs (for those who have not filed an income tax return (ITR) for the last three years prior to withdrawing cash, and the tax due date has expired under section 139(1).) Under this situation, the tax must be deducted at the following rate:||<20 lakh- 2%|
<3 crore (co-operative society)- 5%
|194-O||TDS on payment by an E-commerce operator||5 lakh||1% in case of availability of PAN|
5% in case of unavailability of PAN
|194Q||Payment for the purchase of goods||50 lakh||0.1%|
|194R||Perquisites or benefit to a business or profession||20,000||10%|
|194S||TDS on the transfer of Virtually Digital Asset||Specified Persons- 50,000 |
|206AA||TDS in case of unavailability of PAN||(as per the respective section)||Higher of the following:|
(a) at the rate or rate in force or
|206AB||TDS in case of non-filers of ITR||Higher of the following:|
(b) twice the rate or rate in force
(c) twice the rate specified in the relevant section
[provided that the person is a Non-resident and not having any permanent establishment in India, a person is not liable to file ITR and is not notified by the authorities to do so]
TDS on payments to Non-Resident
Tds u/s 195 is deducted on payments to be made to Non-Resident. There is no threshold limit under section 195 of the Income Tax Act, hence TDS will be deducted from the entire income/amount. TDS shall be deducted at the time of making payment. Form 27Q is required to be submitted on a quarterly basis on or before the due date on payments other than salary made to NRI.
TDS Rate Chart for NRI
|Section||Nature of Payment||Threshold Limit (INR)||TDS Rate Chart|
|195||Payment of any other sum to a Non-Resident Indian (NRI)|
|(a) Income in case of investment made by an NRI||20%|
|(b) LTCG income as referred to in Section 115E, Section 112A & sub-clause (iii) of clause (c) of sub-Section (1) of Section 112.||10%|
|(c) STCG income as referred to in Section 111A||15%|
|(d) Income by way of interest payable by the Government or an Indian concern on funds borrowed or debt incurred by the Government or the Indian concern in foreign currency (other than income by way of interest under Section 194LB or Section 194LC||20%|
|(e) any other income||30%|
Major TDS Amendments in Budget 2023
Section 194BA – Introduction of TDS on Winnings from Online Games
To cover the gaming business under the Income Tax Act, a separate section, i.e., 194BA has been introduced in the Union Budget 2023. This section will be applicable from 1st July 2023.
TDS on winnings is deducted at 30% and further, the deduction threshold cap of INR 10,000 has been removed. The payer will be responsible to file a quarterly return of TDS in Form 26Q within the due date.
Section 194N – Enhanced Limit for Co-operative Society
In case of cash withdrawals from a co-operative society, the limit is proposed to be at INR 3 crores instead of INR 1 crore w.e.f from 1st April 2023.
The goal of this proposed amendment is to relieve co-operative societies from the burden of their frequent cash transactions with farmers and low-income individuals.
Section 192A- Relaxation in case of unavailability of PAN
In the past, if the individual did not provide the PAN number while withdrawing EPF (within 5 years), the TDS rate applicable was 30%. However, w.e.f from 1st April 2023, the rate is now reduced to 20%.
TCS Rate Chart
Tax Collected at Source (TCS) is an income tax, collected by the seller of specified goods, from the buyer. TCS is a concept where a person selling specific items is liable to collect tax from a buyer at a prescribed rate and deposit the same with the Government.
TCS Rate Chart
Given below are the latest TCS rates:
|Section||Collection Code||Nature of Payment||Threshold (INR)||TCS rates|
|206C||A||Alcoholic Liquor for Human Consumption||NA||1%|
|B||Timber obtained under a forest lease||NA||2.5%|
|C||Timber obtained by any mode other than under a forest lease||NA||2.5%|
|D||Any other forest produce not being timber or tendu leaves||NA||2.5%|
|F, G||Grant of a license, lease, etc of the Parking lot and Toll Plaza respectively||NA||2%|
|H||Grant of Mining and Quarrying||NA||2%|
|J||Minerals, being coal or lignite, or iron ore||NA||1%|
|K||Sale of Bullion||> 2 lakh||1%|
|L||Sale of the motor vehicle whether payment is received by cheque or by any other mode||> 10 lakh||1%|
|M||Sale in cash of any other goods except bullion & Jewelry||> 2 lakh||1%|
|N||Providing of any service (other than Ch-XVII-B)||> 2 lakh||1%|
|O||TCS for sale of overseas tour program package||NA||20%|
|P||TCS on remittance under LRS for an educational loan taken from a financial institution as mentioned in Section 80E||NA||0.5%|
|Q||Foreign remittance under LRS||-7 lakh in case of remittances for education and medical purpose|
-No limit in the case of other foreign remittance
|-5% in case of education and medical remittance|
-20 %in case of other foreign remittances
|R||TCS on sale of goods||NA||0.1% (1% in case of non-availability of PAN/Aadhar)|
Major TCS Amendments in Budget 2023
Section 206C (1G) Enhanced TCS rate on certain Foreign Remittances
In the past, the TCS rate on foreign remittances was 5%. Budget 2023 proposed to increase the TCS rate to 20% (w.e.f 1st July 2023) in case of all the remittances under LRS and overseas tour packages. However, the TCS rate for educational and medical purposes in excess of INR 7 lakh continues to be at 5%.
As per the provisions of 194C TDS rate, the payer is required to deduct TDS at 1 % in case of individuals and 2% in case of HUFs. Furthermore, the threshold limit for a single transaction is INR 30,000 and the aggregate Transaction is INR 1,00,000.
As per section 206AA, if you do not furnish your PAN to the payer (i.e., deductor), then the deductor shall deduct tax from whichever is the higher of the following, i.e, at the rate of 20%, or the rates specified in the relevant provision of the act or rates in force or the prescribed in the Finance Act.
You can ask the payer to furnish you with a TDS certificate in respect of the tax deducted. Furthermore, you can also check Form 26AS from your e-filing account on Income Tax Portal or use the “View Your Tax Credit” facility available at www.incometaxindia.gov.in.
As per the provisions of 194Q TDS rate of 0.1% is applicable on purchase of any goods of value exceeding INR 50 lakhs.
As per the provisions of 194H TDS rate is 5% in case the overall payable amount of commission or brokerage exceeds INR 15,000.