Tax Deducted at Source is referred to as TDS. The term "tax deduction at source" (TDS) refers to the practice of collecting tax on income received in the form of wages, rent, sales of assets, dividends, etc., by requiring the payer to withhold the income tax owed while crediting or paying the payee and deposit that money with the government on the payee's behalf. The TDS rate chart, which summarises all of the Income Tax Act's TDS provisions, can be seen below. The Income Tax Department releases a new TDS rate chart annually under the Income Tax Act 1961. The rate charts reflect the amount of TDS to be deducted in the given scenario. But before moving to the rate table, we need to understand what TDS is.
Did you know?
Non-deduction of Tax at Source is only possible if your income falls below the minimum income tax slab. In such cases, you have to declare your income through the for 15G/15H and provide it to the deductor. Form 15G is for individuals, and 15H is for senior citizens.
What is TDS?
The tax, which is deducted at source, also known as TDS, is the tax deducted when a payor makes payments like the salary of the employees, fees for professional services, house rent, etc., by the payor itself. It is a type of direct tax introduced under the Income Tax Act to collect tax at the source itself. Generally, every person has to pay income tax according to their tax slabs. With the help of TDS, the government ensures that tax is collected beforehand for every payment you make.
The payor deducts TDS from the payee's income as a credit to the Central government. The recipient receives the final amount after deductions are made.
They will add the deducted TDS to their gross income. This deducted TDS is adjusted against the final tax filing and can then credit this TDS amount that has been already paid on their behalf by the payor.
The percentage of TDS to be deducted by the payor is decided by the Income Tax department and released annually.
Also Read: All About Income Tax and Tds Password Format With Examples
TDS Rate Table for FY 2022-2023
|
Section |
Nature of Deductee |
Nature of Payment |
Threshold value |
TDS Rate |
|---|---|---|---|---|
|
192 |
Resident and Non-resident |
Salary Income |
Basic income tax exemption limits |
Normal tax Slab Rate |
|
192A |
Resident and Non-resident |
Payment of Pre matured EPF which is taxable on the employee |
₹50,000 |
10% |
|
193 |
Resident |
Debentures on behalf of any local government authority established by an act in the law |
₹5,000 |
10% |
|
193 |
Resident |
Interest on any security issued by Central or State Governments i.e. 8% Taxable savings made on Bonds, 2003 and 7.75% Taxable savings made on Bonds, 2018 |
₹10,000 |
10% |
|
193 |
Resident |
Interests earned on securities and debentures |
₹5,000 |
10% |
|
194 |
Resident |
Income by payment of dividend |
₹5,000 |
10% |
|
194A |
Resident |
Income by interest other than “Interest on securities” |
Senior citizens - ₹50,000
Others - ₹40,000 |
10% |
|
194B |
Resident and Non-resident |
Income by winning money through lotteries, and other game events. |
₹10,000 |
30% |
|
194BB |
Resident and Non-resident |
Income made by betting on horse races and similar events |
₹10,000 |
30% |
|
194C |
Resident |
Payment made to a contractor or sub-contractor |
Single transaction - ₹30,000
Aggregate Transaction - ₹1,00,000 |
For, HUF/Individual - 1%
Others - 2% |
|
194D |
Resident |
Income through insurance commission to domestic companies or individuals |
₹15,000 |
Individual - 5%
Domestic company - 10% |
|
194DA |
Resident |
Income through payments in the form of a life insurance policy |
₹1,00,000 |
5% |
|
194E |
Non-resident and Foreign Companies |
Payments made to non-resident sports personalities/organisations |
No Limit |
20% |
|
194EE |
Resident and Non-resident |
Payments made in deposits covered under the NSS (The National savings scheme) |
₹2,500 |
10% |
|
194F |
Resident and Non-resident |
Payment made for the repurchase of the unit issued by Unit Trust of India (UTI) or a Mutual Fund |
No Limit |
20% |
|
194G |
Resident, Non-resident, and Foreign Companies |
Payments made or commission earned or other expenses by selling lottery tickets |
₹15,000 |
5% |
|
194H |
Resident |
Income through brokerage or commission |
₹15,000 |
5% |
|
194-I |
Resident |
Income from Rent on
|
₹2,40,000 |
For, a. 2%
b. 10% |
|
194-IA |
Resident |
Payments made on the trading of land other than agricultural property |
₹50,00,000 |
1% |
|
194-IB |
Resident |
Payment of rent by an individual or HUF which is not covered under Tax audit |
₹50,000 every month |
5% |
|
194-IC |
Resident |
Payment made for monetary purposes covered under the joint development agreements |
No Limit |
10% |
|
194J |
Resident |
Fees paid for enjoying professional or technical courses or services: a. Sum paid or yet to be paid for technical services b. Fees paid or to be paid as royalty in the consideration for sale, distribution, or exhibition of films and movies c. Any other fees |
₹30,000 |
For, a. 2%
b. 2%
c. 10% |
|
194K |
Resident |
Income in respect of units payable to a resident person |
No Limit |
10% |
|
194LA |
Resident |
Payment of compensation on acquisition of certain immovable property |
₹2,50,000 |
10% |
|
194LB |
Non-resident and Foreign Companies |
Payment of interest on infrastructure debt fund to Non-Resident |
No Limit |
5% |
|
194LC |
Non-resident and foreign companies |
Payment of interest issued by an Indian Company or a business trust in due of money borrowed in terms of foreign currency through an agreement or by issuing long-term bonds (including long-term infrastructure bonds) or Rupee Denominated Bonds |
No Limit |
4%* or 5%
* - In case, if the bonds are listed in IFSC at recognized stock exchanges |
|
194LD |
Non-resident and Foreign Companies |
Payment of interest based on rupee-denominated bonds of an Indian Company or Government Securities to a Foreign investing institution or a foreign investor |
No Limit |
5% |
|
194LBA(1) |
Resident |
Income from any kind of interest received or yet to receive by an employee of a company or a unit holder of the company from an SPV or from renting a house or land owned by him |
No Limit |
10% |
|
194LBA(2) |
Non-resident and Foreign Companies |
For, a. Payment of interest on SPV distributions by the shareholders of the company.
b. Payment of dividend income from SPV holding the entire shares except for the government-held shares |
No Limit |
For,
a. 5%
b. 10% |
|
194LBA(3) |
Non-resident and Foreign Companies |
For, a. Income from payments of assets owned by the business to the unitholders
b. Income earned from renting land or any real-estate property owned by the company's unitholders. |
No Limit |
For, a. 30%
b. 40% |
|
194LBB |
Resident, Non-resident and Foreign Companies |
Income from an investment fund other than those which are exempted under Section 10(23FBB)] |
No Limit |
For, Individual - 10%
Companies - 40% |
|
194LBC |
Resident, Non-resident and Foreign Companies |
Income made from investments made in specific funds mentioned in the explanation of Section (115TCA)] |
No Limit |
For, a. Individuals or HUF - 25%
b. Individuals, not residents of India - 30%
c. Domestic Companies - 10%
d. Foreign Companies - 40% |
|
194M |
Resident |
Payment made for commission (not any kind of insurance commission), brokerage, contractual fee, the professional fee to a resident person by an Individual or a HUF who is not covered qualified to deduct TDS under the sections 194C, 194H, and 194J of the Income Tax Act |
₹50,00,000 |
5% |
|
194N |
Resident and Non-resident |
Withdrawing cash that exceeds the threshold amount |
₹1,00,00,000 |
2% |
|
194N |
Resident and Non-resident |
Cash withdrawn by a person who did not file ITR for the past three years and the current ITR filling date has expired |
a. Exceeds 20 Lakhs
b. Exceeds 1 crore |
For, a. 2%
b. 5% |
|
194-O |
Resident |
Income through payment of an amount from an e-commerce person through their platforms |
₹5,00,000 |
1% |
|
194P |
Resident |
Deductions made by the bank in case of senior citizens equal to the age of 75 or more |
Basic exemption on the limit of senior citizens or super senior citizens |
Normal Tax slab rates |
|
194Q |
Resident |
Amount spent on purchasing goods and commodities less than the threshold value |
₹50,00,000 |
0.1% |
|
194R |
Resident |
Deductions made in tax in the situation of any kind of profit or benefit |
₹20,000 |
10% |
|
194S |
Resident |
Income spend on moving the virtual and digital assets |
Specified Person- ₹50,000
Others - ₹10,000 |
1% |
|
195 |
Non-resident |
Income made by NRI through investment in India |
No Limit |
20% |
|
195 |
Non-resident |
Income made by an NRI through long-term investments mentioned in section 115E |
No Limit |
10% |
|
195 |
Non-resident and Foreign Companies |
Income made by investing in long-term capital according to section 112 (1) (c) (iii) |
No Limit |
10% |
|
195 |
Non-resident and Foreign Companies |
Income made by gains through investment in LTCs mentioned in the section 112A |
No Limit |
10% |
|
195 |
Non-resident and Foreign Companies |
Any other money made through investing in LTC (long-te capital) |
No Limit |
20% |
|
195 |
Non-resident and Foreign Companies |
Income made by short-term capital gains |
No Limit |
15% |
|
195 |
Non-resident and Foreign Companies |
Income made on the interest to be paid by the Government or an Indian authority on a loss or a debt on the Government or the respective authority in terms of foreign currency |
No Limit |
20% |
|
195 |
Non-resident and Foreign Companies |
Income made by the royalty which is to be paid by the Government or an Indian Authority info copyright purposes in a subject as mentioned in the provisions of Section 115A (1A) of the Income Tax Act, to any kind of computer software related purposes mentioned in the provisions of section 115A |
No Limit |
10% |
|
195 |
Non-resident and Foreign Companies |
Income made on the amount payable by the Government or an Authority to compensate an agreement made according to the industrial policies |
No Limit |
10% |
|
195 |
Foreign Companies |
Income made on the amount payable by the Government or an Authority to compensate an agreement made according to the industrial policies a. the agreement is prepared between 31st March 1961 and 1st April 1976
b. The agreement is made after the 31st of March 1976 |
No Limit |
For,
a. 50%
b. 10% |
|
195 |
Non-resident |
Income made on technical fees to be paid by the Indian Government or an Indian authority on the agreements made on issues related to the industrial policies |
No Limit |
10% |
|
195 |
Non-resident and Foreign Companies |
Any other Income |
No Limit |
For a. NRI individuals - 30%
b. Foreign Companies - 40% |
|
196B |
Non-resident and Foreign Companies |
Income from long-term capital units or transfer of these units in offshore funds |
No Limit |
10% |
|
196C |
Non-resident and Foreign Companies |
Income made from bonds including the long-term capital prepared in terms of a foreign currency or GDR of a domestic company |
No Limit |
10% |
|
196D |
Non-resident and Foreign Companies |
Income from foreign investors from foreign institutes |
No Limits |
20% |
In the above table,
1. Resident - Residents of India
2. Non-resident - NRIs or people who don't belong to the Indian Territory
2. Foreign Companies - Companies based outside of India
4. Domestic companies - Companies based in India
Also Read: Income Tax in India: Basics, Slabs and E-filing Process 2022
Conclusion:
We hope that this article has helped you understand the TDS deduction percentages that are determined by the Income Tax Department and updated every year. The TDS rate charts are updated for every financial year and the changes are made by the Income Tax Department. The TDS deducted can then be claimed after filing the ITR at the end of the financial year. Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.
