Latest TDS and TCS Rate Chart for FY 2020-21

TDS Rate Chart

TDS is nothing but an early collection of tax. It needs to be deducted on a specific payment at a prescribed rate by the payer/deductor. Deductor is a person who is liable to deduct TDS before making payment to a deductee. Let’s take a look at the TDS Rates for FY 2020-21. In this article, we take a closer look at the TDS rate chart.

Finance Minister confirms TDS Rates applicable for the coming Financial year in every Budget. During the year 2020, there was Covid-19 induced distress. In order to provide more funds at the disposal of the taxpayers for dealing with the economic situation, the government announced various relief measures on 13 May 2020 through a press release. One of them was a reduction in TDS Rates for FY 2020-21 on non-salaried payments.

The TDS Payments can be divided into 3 sections as TDS on:

  1. Salary Payments
  2. Non-Salary Payments.
  3. Applicable to Non-Residents
TDS Return (24Q) for Salary Payments (Quarterly)
CA Assisted TDS return filing of one quarter for startups, companies and partnership firms making salary payments.
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TDS Return (24Q) for Salary Payments (Quarterly)
CA Assisted TDS return filing of one quarter for startups, companies and partnership firms making salary payments.
[Rated 4.8 stars by customers like you]

TDS on Salary Payments

As per Section 192 of the Income-tax Act, the employer needs to deduct TDS on salary payment. 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.

Due to Covid-19, the government announced a reduction in TDS Rates on Non-Salaried payments on 13 May 2020.
However, there has been no reduction in the TDS Rate of Section 192 TDS on Salary Payments. Therefore, regular slab rate shall be applicable to the employee based on the slab he/she falls in.
Tip
Due to Covid-19, the government announced a reduction in TDS Rates on Non-Salaried payments on 13 May 2020.
However, there has been no reduction in the TDS Rate of Section 192 TDS on Salary Payments. Therefore, regular slab rate shall be applicable to the employee based on the slab he/she falls in.

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, 1961. For payments other than salary deductor has to file TDS Return Form 26Q.

TDS Return (26Q) for Non-Salary Payments (Quarterly)
CA Assisted TDS return filing for employers, firms and companies making payment of Professional fees, Rent, Contracts, Commission, etc.
[Rated 4.8 stars by customers like you]
TDS Return (26Q) for Non-Salary Payments (Quarterly)
CA Assisted TDS return filing for employers, firms and companies making payment of Professional fees, Rent, Contracts, Commission, etc.
[Rated 4.8 stars by customers like you]

In a press release, Finance Minister Nirmala Sitharam as part of the Covid-19 package to revive the economy declared that the TDS rates for all non-salaried payment to residents, and TCS rates will be slashed by 25 percent of the specified rates for the remaining period of FY 2020-21. These rates shall be applicable for the period starting from 14th May 2020 to 31st March 2021.

TDS Rate Chart and sections applicable to Individual/HUF

Given below is the TDS rate chart:

Section

Nature of Payment

Threshold Limit (INR)

Existing Rates

TDS Rates From 14/05/2020    to          31-03-2021

193 Interest on Securities 5000 10% 7.5%
194 Dividend 2500 10% 7.5%
194A Interest other than Interest on Securities 5000 10% 7..5%
194C Payment of contractors and sub-contractors 100000 1% 0.75%
194D Insurance Commission 15000 5% 3.75%
194DA Payment in respect of Life Insurance Policy 100000 1% 0.75%
194EE Payments in respect of
deposits under National
Savings Scheme
2500 10% 7.5%
194F Payments on account
of re-purchase of Units
by Mutual Funds or UTI
20% 15%
194G Commission, prize, etc. on sale of lottery tickets 15000 5% 3.75%
194H Commission or brokerage 15000 5% 3.75%
194-I(a) Rent for Plant and Machinery 240000 2% 1.5%
194-I(b) Rent for immovable property 240000 10% 7.5%
194-IA Payment for acquisition of immovable property 5000000 1% 0.75%
194-IB Payment of Rent 180000 5% 3.75%
194-IC Payment for Joint Development Agreements 10% 7.5%
194J Fee for Professional or
Technical Services
(FTS), Royalty, etc.
30000 2% (FTS, certain
royalties, call
center)
10% (others)
1.5% (FTS, certain
royalties, call
center)
7.5% (others)
194K Payment of Dividend by Mutual Funds 5000 10% 7.5%
194LA Payment of compensation on acquisition of immovable property

250000

10% 7.5%
194LBA(1) Payment of income by business trust  – 10% 7.5%
194LBB(i) Payment of income by investment fund  – 10% 7.5%
194LBC(1) Income by Securitisation Fund  – 25% 18.75%
194M Payment to
commission, brokerage
etc. by Individual/HUF
 – 5% 3.75%
194-O TDS on e-commerce
participants
 –

1%  (w.e.f 01-10-2020)

0.75%

Note: No Reduction in rate of TDS where the tax is required to be deducted at higher rate due to non furnishing of PAN.

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TDS Rate Chart and sections applicable to Others

Section

Nature of Payment

Threshold Limit (INR)

Existing Rates

TDS Rates From 14/05/2020    to          31-03-2021

193 Interest on Securities 5000 10% 7.5%
194 Dividend 2500 10% 7.5%
194A Interest other than Interest on Securities 5000 10% 7..5%
194C Payment of contractors and sub-contractors 100000 2% 1.5%
194D Insurance Commission 15000 5% 3.75%
194DA Payment in respect of Life Insurance Policy 100000 1% 0.75%
194EE Payments in respect of
deposits under National
Savings Scheme
2500 10% 7.5%
194F Payments on account
of re-purchase of Units
by Mutual Funds or UTI
20% 15%
194G Commission, prize, etc. on sale of lottery tickets 15000 5% 3.75%
194H Commission or brokerage 15000 5% 3.75%
194-I(a) Rent for Plant and Machinery 240000 2% 1.5%
194-I(b) Rent for immovable property 240000 10% 7.5%
194-IA Payment for acquisition of immovable property 5000000 1% 0.75%
194-IB Payment of Rent 180000 5% 3.75%
194-IC Payment for Joint Development Agreements 10% 7.5%
194J Fee for Professional or
Technical Services
(FTS), Royalty, etc.
30000 2% (FTS, certain
royalties, call
center)
10% (others)
1.5% (FTS, certain
royalties, call
center)
7.5% (others)
194K Payment of Dividend by Mutual Funds 5000 10% 7.5%
194LA Payment of compensation on acquisition of immovable property

250000

10% 7.5%
194LBA(1) Payment of income by business trust –  10% 7.5%
194LBB(i) Payment of income by investment fund  – 10% 7.5%
194LBC(1) Income by Securitisation Fund  – 30% 22.5%
194M Payment to
commission, brokerage
etc. by Individual/HUF
 – 5% 3.75%
194-O TDS on e-commerce
participants
 –

1%  (w.e.f 01-10-2020)

0.75%

TCS Rate Chart for AY 2020-21 and AY 2021-22

The below table consists of the TCS rate charts from AY 2020-21 and 2021-22. The Finance Minister has made various changes in TDS provisions in the Finance Act, 2020. She also introduced two new sub-section such as section 206C(1G) and 206C(1H) which provides TCS on foreign remittance through Liberalised Remittance Scheme (LRS) and on selling of overseas tour package TDS as well as TCS on sale of goods over a limit.

TCS Rate Chart

Section Particulars TCS Rates  (AY 2020-21) TCS Rates  (Upto 13th May, 2020) TCS Rates (From 14th May, 2020 to 31st March, 2021)
206C(1) Sale of the following:      
  a) Alcoholic Liquor for Human Consumption 1% 1% 1% (No Change)
  b) Tendu leaves 5% 5% 3.75%
  c) Timber obtained under a forest lease 2.5% 2.5% 1.875%
  d) Timber obtained by any mode other than under a forest lease 2.5% 2.5% 1.875%
  e) Any other forest produce not being timber or tendu leaves 2.5% 2.5% 1.875%
  f) Scrap 1% 1% 0.75%
  g) Minerals, being coal or lignite or iron ore 1% 1% 0.75%
206C(1C) Grant of lease or license of the following:      
  a) Parking lot 2% 2% 1.5%
  b) Toll Plaza 2% 2% 1.5%
  c) Mining and quarrying (Other than mining and quarrying of mineral oil, petroleum and natural gas) 2% 2% 1.5%
206C(1F) Sale of the motor vehicle of the value exceeding Rs. 10 lakh whether payment is received by cheque or by any other mode 1% 1% 0.75%
206C(1G)(a) TCS on foreign remittance through Liberalised Remittance Scheme (LRS)

 

(This Section is inserted by Finance Act, 2020 which is proposed to be applicable from 01/10/2020)

(Please refer Note 1 for in depth explanation of this new section)

NA 0.5%: Where
remittance is a repayment of loan obtained for the
purpose of
pursuing any
education.5% In any other
case.(wef 01.10.2020)

 

(10% for non PAN or Aadhaar cases)

(W.e.f. 01/10/2020)

0.5%: Where
remittance is a repayment of loan obtained for the
purpose of
pursuing any
education.5% In any other
case.(wef 01.10.2020)

 

(10% for non PAN or Aadhaar cases)

(W.e.f. 01/10/2020)

206C(1G)(b) TCS on selling of overseas tour package

 

(This Section is inserted by Finance Act, 2020 which is proposed to be applicable from 01/10/2020)

(Please refer Note 2 for in depth explanation of this new section)

NA 5%

 

(10% for non PAN or Aadhaar cases)

(W.e.f. 01/10/2020)

5%

 

(10% for non PAN or Aadhaar cases)

(W.e.f. 01/10/2020)

206C(1H) TCS on sale of any goods [except goods on which TCS applicable as per Section 206C (1), 206C (1F) and 206C (1G)]

 

(This Section is inserted by Finance Act, 2020 which is proposed to be applicable from 01/10/2020)

(Please refer Note 3 for in depth explanation of this new section)

NA 0.10%

 

(1% for non PAN or Aadhaar cases)

(W.e.f. 01/10/2020)

0.075%

 

(1% for non PAN or Aadhaar cases)

(W.e.f. 01/10/2020)

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 quarterly basis on or before the due date on payments other than salary made to NRI. 

Due to Covid-19, there has been a reduction in TDS Rates. However, there has been no reduction in the TDS Rates of Section 195. Therefore, TDS u/s 195 shall be deducted at the same existing rates.

TDS Return (27Q) for NRI Payments (Quarterly)
CA Assisted TDS return filing for employers, individuals and companies making payments to Non Resident Indian (NRI).
[Rated 4.8 stars by customers like you]
TDS Return (27Q) for NRI Payments (Quarterly)
CA Assisted TDS return filing for employers, individuals and companies making payments to Non Resident Indian (NRI).
[Rated 4.8 stars by customers like you]

FAQs

At what rate the payer will deduct tax if I do not furnish my Permanent Account Number to him?

As per section 206AA​, if you do not furnish your Permanent Account Number 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.

How can I know the quantum of TDS deducted?

To know the quantum of the tax deducted by the payer, you can ask the payer to furnish you a TDS certificate in respect of tax deducted by him. You can also check Form 26AS​ from your e-filing account on Income Tax Portal.
You can also use the “View Your Tax Credit” facility available at www.incometaxindia.gov.in

What happens if TDS not deducted?

​It is the duty and responsibility of the payer to deduct tax at source. Therefore, if the payer fails to deduct tax at source, penalty is levied for not depositing or not deducting TDS on time. However, the employer can make the interest payment on such late payment of TDS before filing TDS returns or demand raised by TRACES.