TDS rate chart of FY 2019-20 & AY 2020-21

The TDS compliance of the AY 2020-21 & FY 2019-20 started from 1-4-2019, I Prepared the brief about TDS and tax provision along with important details.

TDS stands for tax deducted at source. As per the Income Tax Act, any company or person making a payment is required to deduct tax at source if the payment exceeds certain threshold limits. TDS has to be deducted at the rates prescribed by the tax department.

The company or person that makes the payment after deducting TDS is called a deductor and the company or person receiving the payment is called the deductee. It is the deductor’s responsibility to deduct TDS before making the payment and deposit the same with the government. TDS is deducted irrespective of the mode of payment–cash, cheque or credit–and is linked to the PAN of the deductor and deductee.

TDS is deducted on the following types of payments:

  • Salaries
  • Interest payable by Assessee
  • Rent payments
  • Consultation fees
  • Professional fees

The Assessee is mandatorily required to deduct tax at source (“TDS”) in applicable cases on various payments (by way of salaries, payment to vendors, rent, etc.) and deposit the same with the Government, within the stipulated time. A short deduction of TDS or non-deduction results in the Assessee being treated as an ‘assessee-in-default’ and consequently, the Assessee is liable for payment of interest on TDS, penalty, etc. Also, such payments are disallowed as a deduction under the Income-tax Act, 1961 where there is a default in deduction and/or deposit of TDS.

1) Finance Act, 2019 has brought some minor changes in the TDS provisions. For your ready reference, TDS rate chart for FY 2019-20 is provided below:

  • 194A the interest limit is enhanced from Rs. 10,000/- to Rs. 40,000/- in case of payer is bank, co-operative society and post office. If the payee is senior citizen, the limit is Rs. 50,000.
  • 194-I the monetary limit enhanced to Rs. 2,40,000/- from Rs. 1,80,000/-. Accordingly, if the  rent payment does not exceed Rs. 2,40,000/- in a financial year, deductor is not require to deduct the TDS.

A) Commonly used TDS Provision for payments made to persons resident in India (Individuals, Firms, Companies, etc.):- 

Commonly used TDS Provision for payments made to persons resident in India (Individuals, Firms, Companies, etc.):- 

Section Nature of Payment for Domestic Transactions Threshold Limit Individual / HUF Others
Rs. TDS Rate (%)  
192 Salaries (Annexure-I) Basis on Slab
192A Premature withdrawal from EPF 50,000 10
193 Interest on Securities/ Debentures 10,000 10 10
  194A Interest (Banks, co-operative society and post office)/ For Senior Citizen Rs. 50000 40,000/ 50000 10 10
Interest (Others) 5,000 10 10
    194C   Contractor – Single Transaction 30,000 1 2
Contractor – During the F.Y. 1,00,000 1 2
Transporter (44AE) declaration with PAN
194H Commission / Brokerage 15,000 5 5
    194I Rent of Land and Building – F&F 2,40,000 10 10
Rent of Plant / Machinery / Equipment 2,40,000 2 2
194IB Rent by Individual / HUF (wef 01.06.2017) 50000/PM 5
194IA Transfer of certain immovable property other than agriculture land 50,00,000 1 1
      194J Professional Fees / Technical Fees /Director fees/ royalty 30,000 10 10
Payment to Call Centre Operator (w.e.f. 01.06.2017) 30,000 2 2

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