written by Sourish | June 8, 2021

TDS Rate Chart For FY 2021-22

Tax Deducted at Source (TDS) is a concept that was introduced by the Central Government to collect tax from the very source of income. When a person makes a payment to someone, they deduct a certain amount from the total payment, which is then paid to the Central Government by that person. 

Generally, TDS is deducted by a person when paying salary, rent, commission, etc. to the payee(receiver). The person who deducts the TDS is liable to pay the tax to the government. 

Tax Deducted at Source Rate Chart

Various slabs have been set by the Government to collect tax in the form of TDS. The rate of TDS varies depending upon the nature of payment, resident or non-resident, senior citizen, and many more categories. 

Following is the TDS Chart for the financial year 2021-22

Section

Nature of Payment

Threshold Limit for deduction tax

Rate of TDS applicable for the period on Individuals, Company, and others 

Individual

Company

If No Pan or Invalid PAN (Rate in %)

192

For Salary

No changes made 

Slab Rates (in %)

Slab Rates (in %)

30

192A

For Prematurely withdrawing EPF Fund

Rs. 50000

10

NA

20

193

For Interest on securities

Rs. 2500

10

10

20

194

For paying dividend other than dividend(refer to Section 115-O

Rs. 5000

10

10

20

194A

For interest on Banks  Deposit, Recurring Deposit, and Deposit with Co-op Banks

·For Senior Citizen  

Rs. 50000

 

For Others 

Rs. 40000

10

20

194B

For Income earned by winning the lottery

Rs. 10000

30

30

30

194BB

 For Income earned from winning horse races

Rs. 10000

30

30

30

194 C

For Payment made to Contractors

·  One payment: Rs. 30,000

· Overall payment: Rs. 1,00,000

1

2

20

194C

For Contracts which are referred under 44AE 

·   One payment: Rs. 30,000

·  Overall payment: Rs. 75000

1

2

20

194 – D

For Insurance commission

Rs. 15000

5

10

20

194 -DA

For Payment made for the life insurance policy, it shall be deducted on the basis of the amount of income comprised

Rs. 100000

5

5

20

194 – E

For Payment made to sportsmen or associations who are non-residents

 

20

20

20

194 -EE

For Payment which is made under the National Savings scheme

Rs. 2500

10

10

20

194 -EE

For Payment made for repurchasing unit of Mutual Fund or Unit Trust of India

 

20

20

20

194 – G

For Commission paid on the sale of lottery tickets

Rs. 15000

5

5

20

194 – H

For payment of Commission or brokerage

Rs. 15000

5

5

20

194 – I

For paying rent on:

NA

NA

NA

NA

 

 Plant & Machinery

Rs. 240000

2

2

20

 

Land or building or furniture or fitting

Rs. 240000

10

10

20

194 -IA

For Transfer of immovable property except for agricultural land

Rs. 50,00,000

1

1

20

194 -IB

For Payment of Rent made by Individuals and HUF which is not liable for Tax Audit

Rs. 6,00,000 annually

5

20

194 -IC

For Payment under Joint Development Agreements

10

10

20

194 -J

For payment of Fees for rendering professional or technical services:

If the hirer is engaged in the business of call centre

Rs. 30000

2

2

20

   

In all other cases

Rs. 30000

10

10

20

194 – K

For Payment in respect of  Units of Mutual fund or Units of the administrator or from any specified company which generates income

10

10

20

194 -LA

TDS applicable on compensation for compulsory acquisition of immovable Property

Rs. 2,50,000

10

10

20

194 – LBA(1)

TDS applicable on distribution of any interest received or receivable from a Special Purpose Vehicle or any income generated  from renting or leasing or letting out any to its unitholders

10

10

20

194 – LBA(2)

For Distribution of any interest received or receivable from Special Purpose Vehicle by the Business trust

10

10

20

194 – LBA(3)

For Distribution of, any income received from renting or leasing or letting out any real estate asset owned directly by the Business trust

10

10

20

194 -LB

For Paying interest on infrastructure debt fund to Non Resident

5

5

20

194 -LBB

For Investment fund paying an income to a unitholder

 

10

10

30

194 -LBC

For Income in respect of investment made in a securitization trust 

 

25

10

30

194 – M

For Payment of the commission, brokerage, contractual fee, the professional fee to a resident person by an individual or a HUF who is not liable to deduct TDS under section 194C, 194H, or 194J.

Rs. 50,00,000

5

5

20

194 – N

For Cash withdrawal

NA

NA

NA

20

194 – O

For using E-Commerce for sale of goods 

Rs.5,00,000

1

1

20

194 – Q

For purchase of goods ( will be applied from 01.07.2021)

Rs 50,00,000

0.10

0.10

NA

195

For Payment made to any  Non -resident

TDS of 20.80% of the income on the investment made and 10.40% on long-term capital gains. 

NA

NA

NA

194 – P

TDS on Senior Citizens above 75 Years

Relaxation for Senior citizens above the age of 75

NA

NA

NA

206 -AB

TDS on non -filers of ITR

Non-filers need to pay double the TDS in force. 

NA

NA

NA

Also ReadIncome Tax Slabs

Tax Deducted at Source on Service

As per GST law, Mr. Anil deducts the TDS while paying to the suppliers for supplying goods and raw materials. He must deduct TDS at the rate of 2% for payment made to suppliers, if the amount exceeds Rs 2, 50,000.

Following are the authorities who are liable to deduct TDS under the GST Law:

  • Central Government and State government
  • Local Authority
  • Governmental Agencies
  • Persons notified by the Government

The TDS deducted is to be paid to the government accordingly. In the case of IGST and CGST, TDS is to be paid to the Central Government. And in the case of SGST, TDS is to be paid to the State Government.

Tax Deducted at Source on Company (Salary)

In the case of a company, the employer deducts TDS from its employee’s salary at an Average Rate. This rate is calculated in the following method: 

 

Average Income Tax Rate =            Income tax payable        

                                                 Employee’s Estimated Income

 

The rate of TDS ranges from 10% to 30% depending upon the salary earned by the employee and the income tax slab rate they fall under.

 

This tax is paid by the company to the government while filing the income tax return. This helps in reducing the burden of the employee as tax is paid by the company on their behalf. 

 

This is also beneficial from the point of view of the Government as the Company is collecting the tax from its employees and paying the same to the government while filing their Income Tax Return. It helps the government in the following ways:

 

  1. Regular deduction and payment of taxes ensures a continuous flow of income to the government.
  2. It helps the government in minimising tax evasion by the taxpayers.

Also Read: UAN‌ ‌Status,‌ ‌Passbook‌ ‌And‌ ‌Account‌ ‌Balance‌

Tax Deducted at Source for Company

Following rates are applicable to the TDS collected in the case of Domestic Companies:

  • Commission and Brokerage: 5%
  • Rent: 
    • Plant and machinery - 2%, 
    • Land and Building – 10%
  • Transfer of immovable property: 10%
  • Interest on Securities: 10%
  • Income from the lottery: 30%
  • Income from winning horse race: 30%
  • Payment made to Contractor: 2%
  • Insurance commission: 10%
  • Payment to non-resident sportsmen: 20%
  • Deposit under The National Savings Scheme: 10%
  • Commission on sale of a lottery ticket: 5%
  • Payment of monetary consideration: 10%
  • Professional and Technical Services: 2%
  • Other services: 10%
  • Investment fund: 10%
  • Income in respect of investment: 10%
  • E-commerce operation: 1%
  • Purchase of goods: 0.10%

Tax Deducted at Source for Individuals

Following rates are applicable to the TDS collected in the case of individuals:

  • Premature withdrawal from EPF Fund: 10%
  • Interest on securities: 10%
  • Income by way of the lottery: 30%
  • Income by winning horse race: 30%
  • Payment to contractors: 1%
  • Insurance commission: 5%
  • Payment to Non-resident sportsmen: 20%
  • Payment on account of repurchase of Mutual Fund: 20% 

Also Read: Challan 280 : How To Pay Your Income Tax Online With Challan 280

FAQs 

  1. What do you mean by TDS?

TDS is the amount of tax that is deducted by the payer from the payee while paying them for providing a service. After the deducting, the amount is paid to the Government when the payer files their income tax return.

  1. When is TDS deducted?

When a person renders a service and is paid for the service, then the payer can deduct the amount of TDS from the payee accordingly and pay the same to the government.

  1. Why is TDS Deducted?

TDS is deducted because it helps in reducing the burden of the payee. The payer along with the tax pays the TDS to the Government. This helps the government in receiving a regular source of income. It also helps the government in minimising tax evasion by the taxpayers

  1. What is the TDS rate on Salary?

TDS is applicable on salary. The rate of TDS depends upon the different income slabs. This rate ranges from 10% to 30%. This is deducted by the employer and pays it to the government on the employee’s behalf.

  1. Is there any minimum amount up to which tax is not deducted?

The Income Tax Act has prescribed various threshold limits and TDS is deducted if the threshold limit is crossed. 

  1. Can the payee request the payer not to deduct TDS?

Yes, the payee can request the payer not to deduct TDS. The payer and the payee need to give a declaration in Form 15G or 15H. The form will declare that the total estimated income of the year after concluding that the taxable income is Nil.

  1. What is the duty of the deductor?

A deductor is the one who deducts TDS from the payee and deposits the same to the Government. The duty of the deductor is to collect tax in the form of TDS and make sure that tax is collected from every possible income and at the end of the financial year, the deductor deposits the money to the government.

  1. At what rate the payer will deduct tax if someone does not furnish PAN Number to him?

If the deductor is not provided with the PAN number, he shall deduct TDS as specified in the provision, which is at the rate of 20%.

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