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Amendment in TDS rates / Provisions U/s. 194C & 194I

Amendment in TDS rates and Provisions U/s. 194C & 194I of the Income Tax made in Finance Budget 2009-2010

194C- Under this section earlier there was same Rate of TDS in respect of Payment to all the class of the Assesses. Now finance minister has changed the rates and provided that that any person shall deduct tax at source at the rate of one per cent,if the payee is an individual or a Hindu undivided family or at the rate of two per cent. in the case of any other person, on payment to a resident contractor for carrying out any work.

194-I- Under this section Earlier TDS was required to be deducted @ 10% if the same was in respect use of any machinery or plant or equipment this rate is now been reduced to 2% w.e.f. 01.10.2009. Earlier there were two rates in respect of use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings at the rate of fifteen per cent for the where the payee is an individual or a Hindu undivided family and twenty per cent, where such payee is a person other than an individual or a Hindu undivided family. Now there is a uniform rate of 10% in respect of Payment for use use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings for type of Assesses.

Clause Description Prior to Finance Bill’2009 Mentioned in Finance Bill’2009
Clause 60 194C of the Income-tax Act relating to deduction of tax at source on payment to contractors and sub-contractors If certain persons make payment for carrying out any work to a contractor then tax is deductible at source at the rate of one per cent, in the case of payment for advertising contract and two per cent,  in the case of any other contract. Further, tax is deductible at source at the rate of one per cent. When a contractor makes a payment to a sub-contractor. The section further provided that no tax shall be deductible at source on payment or credit up to twenty thousand rupees. However, if the aggregate payment or credit exceeds fifty thousand rupees in a year then tax is deductible at source. The provisions give exemption from tax deduction at source on payment made to a sub-contractor during the course of business of plying, hiring or leasing goods carriages on fulfillment of certain conditions Sub-section (1) of the proposed amendment provides that any person shall deduct tax at source at the rate of one per cent,if the payee is an individual or a Hindu undivided family or at the rate of two per cent. in the case of any other person, on payment to a resident contractor for carrying out any work.
Clause 61 194-I of the Income Tax Act, which relates to deduction of tax at source on any income payable by way of rent Clauses (a), (b) and (c) of the said section provide for deduction of tax at source on income by way of rent. It, inter alia provides such deduction at the rate of ten per cent for the use of any machinery or plant or equipment. It further provides that such deduction at the rate of fifteen per cent for the use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings where the payee is an individual or a Hindu undivided family and twenty per cent, where such payee is a person other than an individual or a Hindu undivided family It is proposed to substitute the said clauses (a), (b) and (c) by new clauses (a) and (b) so as to provide that deduction of tax at source on an income by way of rent shall be at the rate of(a) two per cent. for the use of any machinery or plant or equipment; and (b) ten per cent. for the use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings

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0 Comments

  3. spytech says:

    sir,
    my co. received advertisement bill of Rs.70000 in year 2010-11 from a newspaper publisher. but, not deducted tax on it as negotiations were going on. now in current year 2011-12, this amount got final to Rs.65000.now , what wou;d be the treatment for TDS????since tds exemption amt raised to Rs.75000 for this f.y….

      Reply
  4. Sourav chatterjee says:

    a house property has 5 co-owners,it alredy let out to a Nationalised bank,co-owners made an agreement with bank about their respective share of property,a co-owner used to receive the entire rent on behalf of the other co-owners,in the previous year income was Rs.1,35,000.but in this current financial year 2011-12 the income will be more or less Rs.6,00,000,now bank want to deduct tax at source.

    but my question is that-

    (1) as per agreement, bank know that there are 5 co-owners,so how the bank can deduct tds?(as the limit of charge i.e. Rs.1,80,000 apply on 5 co-owners.)

    (2)for house property income,in ITR there is no place to write that the concern person is co-owner (who receive the entire amount from bank) and the entire rent received is not his own income,but he entitled to refund the tds amount.what is the procedure to prove that?

    (3)in case of online return filing,in assessment,if needed for clarification of that matter,to whom I’hv to show the agreements/tds cert etc.

    and also
    (4) please guide me with the best possible way to avoid TDS or claim the refund easily

      Reply
  5. Abraham says:

    Dear Sir,
    We have the following doubts;

    1. We have to make a payment to a shipping company for container charges. Please let us know the percentage of TDS deductable for them also please let us know whether Education Cess and Higher Education Cess are also to be deducted or no?

    2. We also have a payment to the same clearing company for the local clearance and transportation bills they have raised. Please let us know the percentage of TDS deductable for them also please let us know whether Education Cess and Higher Education Cess are also to be deducted or no?

    Look forward your supports,
    Regards,
    Abraham.

      Reply
  6. periasamy says:

    Sir I am an employee in Govt of Tamilnadu. Every month certain amount will be deducted as tds from my salary. From April 2010 to June 2010 the amount accounted to my PAN. From July to Jan 2011 the amount (Rs. 30000) accounted to an unknown PAN erroneously. What can I do.

      Reply
  7. EE, AAWD says:

    Pl let me know whether Ed. Cess & surcharge is applicable or not and send the latest TDS rate chart in all section for financial year 2010-11

      Reply
  8. Rahmatul Haque says:

    sir
    I want to know about TDS on rent. If a company Paid rent two membrs and members are wife & Husband, the rent amount paid Rs 120000/- each member.
    weather TDS deduct or not.

      Reply
  12. jigar says:

    my client use other CHA (Clearing & forwarding agents licence) my client pay licence rent p.m 20000/-yearly 240000/- pls guidance T D S Payable % 10 ya 15% thank

      Reply
  13. Gajra says:

    my client use other CHA (Clearing & forwarding agents licence) my client pay licence rent p.m 20000/-yearly 240000/- pls guidance T D S Payable % 10 ya 15% thank

      Reply
  15. N R Khadke says:

    I am taking taxi on hire basis for time to time when requir for guests, staff any out side toor etc.the payment will go up to 1 lac in a year can this attract TDS 194c

      Reply
  16. satish sharma says:

    Pls advice if we are partner ship firm and paying property rent to a Pvt Ltd Co then on which rate and which amount TDS applicable on whole amount including service tax or on principal rent amount

      Reply
  25. Hamsa says:

    Rate of income tax, cess and surcharge deduction in respect of rent for the financial year 2010-11 and the assessment year 2011-12.

      Reply
  28. AMIT SINGHI says:

    Amit Singhi CA says:
    Payment made to transporterS as freight for carting of goods are subject to TDS , if they provide their PAN no on their respective GR NO.
    ARE THEIR ANY PROVISIONS FOR NON DEDUCTION OF TDS IN THAT CASE

      Reply
  30. Jagan says:

    For the business purpose we have asked the Space & Power from a Govt of India Enterprise in September 2009.

    What will be the TDS rates for the power and Space provided by them

      Reply
  31. Bhuvanesh Kumar says:

    Please send me latest rate of TDS in all Section as per Budget for 2009-10, prior to finance bill 2009, there was educationcess @ 2% and 1% SH Education Cess existing on the TDS. what is the status of applicability in the finance bill 2009

    Thanks & Warm Regards,
    Bhuvanesh Kumar.

      Reply
  33. R VENKATA REDDY says:

    prior to finance bill 2009, there was educationcess @ 2% and 1% SH Education Cess existing on the TDS. what is the status of applicability in the finance bill 2009. pl reply. regards.

      Reply

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