Revised TDS/TCS Rate Applicable As Per Covid Economic Relief Package Applicable For All Kinds Of Payments W.E.F. 14th May 2020.

Union Minister of Finance & Corporate Affairs Smt. Nirmala Sitharaman has announced today Reduction in Rates of Tax Deduction at Source (TDS) and ‘Tax Collected at Source (TCS). The TDS rates for payment to residents other than Salary, and tax collected at source rate will be reduced by 25 percent of the specified rates for the remaining period of FY 2020-21 i.e. from 14.05.2020 to 31.03.2021.

Though, in the speech by the Hon. Finance Minister, she mentioned that TDS rates shall be reduced on all types of payments made, a press release by the Government late night has given the list of Sections where the reduced rates are applicable. The TDS will be continued to be charged at original rates on all other sections as also to all payments made to non-residents.

TDS/TCS Rate

TDS Rate Chart for F.Y. 2020-21 (A.Y: 2021-22) after considering changes w.e.f. 14.05.2020

Kindly Note amended rates are been given on the basis of PIB Notification dated 13.05.2020 and on the date of Publication of this post no notification in this regard is been notified by the CBDT. Press release can be accessed at the following link-  https://pib.gov.in/PressReleasePage.aspx?PRID=1623745

Section Nature of payment Threshold Limit Till 13/05/2020 From 14/05/2020
Resident Non-resident* Resident Non-resident*
Rs. TDS Rate (%) TDS Rate (%) TDS Rate (%) TDS Rate (%)
192 Salaries Normal slab rate Normal slab rate Normal slab rate Normal slab rate
192A Premature withdrawal from EPF 50000 10 10 10 10
193 Interest on securities – 8% Savings (Taxable) Bonds, 2003 or 7.75% Savings (Taxable) Bonds, 2018 during the financial year 10000 10 0 7.5 0
193 Interest on securities – Interest on securities for money issued by or on behalf of any local authority/ statutory corporation, listed debentures of a company (other than demat form), any other interest on securities Rs. 5000 in case of Individual 10 7.5
194 Dividends 5000 10 7.5
194A Interest (Banking co., co-operative society engaged in banking, post office) 50000 10 7.5
194A Interest (Any other person) 5000 10 7.5
194B Winning from lotteries 10000 30 30 30 30
194BB Winning from Horse race 10000 30 30 30 30
194C Contractor-Single transaction-Individual/HUF 30000 1 0.75
-Others 2 0- 1.5
194C Contractor – Consolidated Payment During the F.Y. 100000
– Individual/HUF 1 0.75 0-
– Others 2 1.5
194C Transporter (44AE) declaration with PAN 0 0 0 0
194D Insurance commission – Other than Company 15000 5 0 3.75 0
                     – Company 10 0 7.5 0
194DA Maturity of Life insurance policy 100000 5 0 3.75 0
194E Non-resident sportsmen or sports association NA 20 NA 20
194EE NSS 2500 10 10 7.5 10
194F Repurchase units by MFs 20 20 15 20
194G Commission-Lottery 15000 5 5 3.75 5
194H Commission /Brokerage 15000 5 0 3.75 0
194I Rent of – Plant/Machinery/Equipment 240000 2 0 1.5
        – Land and Building/Furniture & Fixture 10 0 7.5
194IA Transfer of certain immovable property other than agriculture land 50 lakh 1 0 0.75
194IB Rent by Individual/HUF 50000 per month 5 0 3.75
194IC Payment under Joint Development Agreements to Individual/HUF 10 0 7.50 0
194J Professional Fees 30000 10 0 7.5 0
194J Technical Fees (w.e.f. 01.04.2020) 30000 2 0 1.5 0
194J Payment to call centre operator (w.e.f. 01.06.2017) 30000 2 0 1.5 0
194J Director’s fees NIL 10 0 7.5 0
194K Payment of any income in respect of 5000 10 0 7.5 0
(a) units of a mutual fund as per section 10(23D); or
(b) the units from the administrator; or
(c) units from specified company
(w.e.f. 01.04.2020)
194LA Compensation on transfer of certain immovable property other than agriculture land 250000 10 0 7.5 0
(TDS exempted if covered under RFCTLARR Act w.e.f. 01.04.2017)
194LB Income by way of interest from infrastructure debt fund 0 5 0 5
194LBA Income from units of business trust
– interest received or receivable from a special purpose vehicle; or 10 5 7.5 5
– dividend referred to in sub-section (7) of section 115-O 10 10 7.5 10
194LBA Distribution of rental income to unit holders
– Other than Company 10 30 7.5 30
– Company 10 40 7.5 40
194LBB Income in respect of units of investment fund
– Other than Company 10 30 7.5 30
– Company 10 40 7.5 40
194LBC Income in respect of investment in securitization fund
                     – Individual/HUF 25 30 18.75 30
                     – Company 30 40 22.5 40
                     – Other Person 30 30 22.5 30
194LC Income by way of interest by an Indian specified company to a non-resident/foreign company on foreign currency approved loan / long-term infrastructure bonds from outside India 0 5 0 5
194LC Income by way of interest by an Indian specified company on rupee denominated bond / any long-term bonds from outside India, which is listed only on a recognized stock exchange located in any International Financial Services Centre 0 4 0 4
194LD Interest on certain bonds from Govt. securities 0 5 0 5
194M Certain payments by Individual/HUF 50 lakh 5 0 3.75 0
194N Payment of certain amount in cash 1 Crore 2 2 2 2
194N Payment of certain amount in cash (first proviso of section 194N- assessee has not
furnished return for
last 3 assessment years
) if-
20 Lakh
–  Amount is more than Rs.20 lakh but up to Rs. 1 crore 2 2 2 2
–  Amount exceeds Rs. 1 crore 5 5 5 5
194-O Applicable for e-commerce operator for the sale of goods or provision of services facilitated by it through its digital or electronic facility or platform (w.e.f. 01.04.2020) 1 0 0.75 0
195 Income of Investment made by an NRI 0 20 0 20
195 Long-term capital gain
– Under Section – 115E/112(1)(c)(iii)/112A 0 10 0 10
– Any Other Gains 0 20 0 20
195 Short-term capital gain – 111A 0 15 0 15
195 Royalty 0 10 0 10
195 Fees for technical services 0 10 0 10
195 Interest income payable by Govt./Indian concern (other than section 194LB or 194LC) 0 20 0 20
195 Any Other Income – Other than Company 0 30 0 30
– Company 0 40 0 40
196A Income in respect – 0 20 0 20
– of units of a Mutual Fund specified under clause (23D) of section 10; or
– from the specified company referred to in the Explanation to clause (35) of section 10
196B Income from units to an offshore fund 0 10 0 10
196C Income from foreign currency bonds or GDR of an Indian company 0 10 0 10
196D Income of foreign Institutional Investors from securities (not being interest referred to in section 194LD, not being dividend referred in section 115-O, not being capital gain from transfer of securities referred in section 115AD) 0 20 0 20
* TDS rate shall be increased by applicable surcharge and Health & Education Cess.

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

TDS rates for Salaried persons and Non Resident Persons shall remain unchanged and old rates shall apply as usual.

The TDS on the amount paid or credited during the period from 14th May 2020 to 31st March 2021 shall be deducted at the reduced new rates as specified in the above table. Similarly the tax on the amount received and debited during the period from 14th May 2020 to 31st March 2021 shall be collected at new rates as specified in the table.

This relaxation only applies to payment made between 14th May 2020 and 31st March 2021. So this will not cover payments made before 14th May 2020.

TCS Rate Chart for F.Y. 2020-21 (A.Y: 2021-22) after considering changes w.e.f. 14.05.2020

Section Nature of payment Till 13/05/2020 From 14/05/2020
TCS Rate (%) TCS Rate (%)
206C Scrap 1 0.75
206C Tendu leaves 5 3.75
206C Timber obtained under a forest lease or other mode 2.5 1.875
206C Any other forest produce not being a timber or tendu leaves 2.5 1.875
206C Alcoholic liquor for human consumption and Indian made foreign liquor 1 1
206C Parking lot, toll plaza, mining and quarrying (other than mining and quarrying of mineral oil, petroleum and natural gas) 2 1.5
206C Minerals, being coal or lignite or iron ore 1 0.75
206C Sale of motor vehicle of the value exceeding Rs. 10 Lacs 1 0.75
206C Remittance out of India under the Liberalized Remittance Scheme of the RBI of the value exceeding 7 Lacs in a financial year 5% (Wef 01.10.2020) 5% (Wef 01.10.2020)
206C Sale of overseas tour programme package 5% (Wef 01.10.2020) 5% (Wef 01.10.2020)
206C Remittance out of India for education under the Liberalized Remittance Scheme of the RBI of the value exceeding 7 Lacs in a financial year 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)

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)

206C Sale of any goods (other than goods exported out of India or goods given in the above points) of the value exceeding 50 Lacs 0.1 (Wef 01.10.2020) 0.075 (Wef 01.10.2020)

No Reduction in rate of TCS  where the tax is required to be collected at higher rate due to non-furnishing of PAN/ Aadhaar.

Compiled By M/S. Sanjay Thampy & Associates, Chartered Accountants

Please note article is been amended after publication to give effect to press release issued by Ministry of Finance.

Disclaimer: The contents of this article are for information purposes only and does not constitute an advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up.  The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional. Please refer to the complete Terms & Disclaimer here. Terms & Disclaimer

Author Bio

Qualification: CA in Practice
Company: Sanjay Thampy and Associates
Location: Mumbai, Maharashtra, IN
Member Since: 22 Apr 2020 | Total Posts: 9
A practicing Chartered Accountant, I expertise in direct and indirect tax laws providing advisory services to various large and medium sized corporates. View Full Profile

My Published Posts

More Under Income Tax

110 Comments

  1. Vimal says:

    Given instruction to service provider – deduct TDS as per new revised rates, but they are deducting OLD rates & replied that “There is no notification issued for deduction of TDS @7.5% instead of 10% in press release”. How we reply to this query???

  2. RAchel says:

    HelloSir,

    What should be the rate of TDS applicable in the below scenario?
    1. Date of invoice 30.6.2020
    2. Old LDC valid till 30.6.2020 @ 6%
    3. Reducted Tax rates effective July 2020 u/s 194J 7.5%
    4. New LDC received valid from 2nd July 2020-31.3.2020 @ 0.15%

  3. Shringar says:

    Sir, I have purchased resale flat in June20 and i have deducted 1%TDS while paying to seller. When i tried to pay TDS in site, its 0.75%. Is TDS is revised? Kindly reply as seller is asking for 0.25% refund. Should i go ahead and refund 0.25%? Or is it like this revision is temporary and i may have to pay 0.25% later? Kindly help

  4. sidhartt gupta says:

    what will be the TDS rate for amount & bookings received through e-commerce website for online tuition/workshops services? For ex:. Website A is taking Bookings & Money from parents and forward 100% amount to proprietorship institute (main service provider).

  5. Basker says:

    Dear sir.. we are making payment for the bus operators for their service provided from september 2019 to November 2019 under section 194c. The bill was in letter pad and no date mentioned , the payment will made in and around June.. what rate of tds should I deduct.. pls reply sir..

  6. Maruthi prasanna s says:

    Invoice Date is 12.05.2020, But Credited In our Books on 18.05.2020 & Payment Also made After 18.05.2020, what is TDS rate New rate? Or Old rate?

  7. renu says:

    sir

    If the supply of goods and vendor’s bill is of date 10 may, but payment is made after 14th may, we should deduct TDS at the old rates as the TDS is deducted on accrual of payment basis, which was before 14th May. This is my opinion. Need your guidance.

  8. abhisek Kumar says:

    Sir,
    i have received invoice on dated 18.05.20 but invoice date is 30.04.20 then what is the rate of TDS is applicable

  9. manali says:

    Hi,
    pls let me know if Party gives us TDS declaration on Professional fees @ 4% till June 2020. so TDS will deduct as per the new rate or 4% ?

  10. Pandian says:

    Sir the bill date is 13.05.2020 but received 14.05.2020 and booked 14.05.2020 in this case what is the tds rate for contract old or new

  11. Jaspreet Singh says:

    Helo Sir,

    Can you please through some light on the below query.
    TDS rates for a FY is specified in respective Finance Act. Therefore, any changes in TDS rate has to be effected by way of Amendment to that Finance Act. Since Parliament is not in session, hence is expected that the Hon’ble President will cause to issue an Ordinance to give effect to these changes announced by the Hon’ble FM on 13th May 2020 and the Ordinance will come into force from the day it is signed by the President. Para 5 of the Press release clearly mentions that legislative changes are being proposed.

    Therefore, unless Ordinance is promulgated reduced rate of TDS cannot be applied

  12. Vikram says:

    Hi Sanjay
    Just wanted to confirm from you regarding the vendor payment for the service procured in the month of April’2020 and the vendor invoice date was dated 30th of April’2020 but expenses are going to be booked in the books of accounts after 14th of May’2020. In such cases what will be the TDS rates to be deducted from the vendor payment?
    Please suggest.
    Waiting for your quick response. Thank you in advance.

  13. Vaishali Soni says:

    Hi Sir, We want to send an emails to all our clients for revised rate of TDS, what should we write in email for better understanding.

  14. Vivek Rathod says:

    Dear Sir,

    if we have pass the provision for audit fees expenses for FY 2019-20 and now we will make the payment after 14th May’20, then TDS rate will be applicable old or new

  15. CA Ganesh Kumar says:

    What are the consequences of not following the reduced rates of TDS. If I deduct 10% instead of 7.5%, will there be any penal consequences.

  16. kumari says:

    If I have raised a bill on 15.5.2020 but PART payment of which has been made before 14.5.2020 then which rate will be applicable? whether whole amount will attract old rate or revised rate? or Previous rate on part payment and revised rate on the rest amount? please clarify

  17. Shailesh says:

    While the finance ministry has announced these measures, the tax portals like NSDL are yet to update the new rates and are forcing you to apply the old rates even till today when you are making TDS payments esp for TDS on purchase of immovable property or rent. Any idea as to when these would change.

  18. Harshad says:

    Received an invoice dated 5th May 2020. Will be processing for payment on 18th May 2020. Will TDS be applicable as per old or new rates?

  19. Prashant K says:

    Sir, Thank you for your reply. Provision for expenses are done on the basis of estimates at the year end (31st March 2020) and accordingly TDS is deducted on such provisions (like out of pocket exp to auditor, which may or may not match with contract amount). Hence, there is possibility of actual expenses may increase or decrease and resultant TDS on the same. In case of increase of expenses, TDS on increased amount will have to be charged at reduced rate and if there is decrease, the TDS deducted at the time of provision will be considered (old rates of TDS) and balance amount will be paid to the vendor. Am I correct?

  20. Prashant K says:

    Sir, If the TDS deducted in Provision on consultancy charges @ 10% on Rs.10000/- as at 31/03/20 but final invoice received on 14th May 2020 of Rs.15000/-, what will be the total amount of TDS on consultancy charges?

  21. Surbhi says:

    The notification did not mention about section- 194D in case of domestic companies. It only talks about section- 194 D in case of individuals.
    What will be the rate of TDS?

  22. Kumari says:

    Sir if i have raised a bill on 15.3.2020 but PART payment of which has been made before 14.3.2020 then which rate will be applicable? whether whole amount will attract old rate or revised rate? or Previous rate on part payment and revised rate on the rest amount? please clarify

  23. anupam says:

    bill dated 31.03.2020 for works pertaining to march 2020. now processing for payment …will it be the new rate or old one?

  24. Venu says:

    Dear Sanjay

    Glad that you are responding to every comment. Can we start applying lower TDS rate based on Press release? Should we not wait till legislative amendment is done?

  25. kailash chand says:

    if my bill 31 march 2020 and today done the payment 15.05.2020 what rate application of tds ( old rate or new rate w.e.f 14.05.2020

  26. Rishabh Jain says:

    Hello Sir,

    Will these reduced rates even apply in case where TDS is deducted as per section 197, wherein a reduced rate of TDS is levied ?
    Or will it work as say 194C, 194J r/w 197 so reduced rate will apply?

  27. Krishnan says:

    When the TDS is reduced and tax filing dates are changed but no mention is made on the advance tax payment dates. Hence the TDS reduction will amount to higher payment at the time of advance tax or the incidence of interest will be higher . Please clarify

  28. vikram kandpal says:

    what if my invoice pertain to April 2020 but booking is 14th may 2020? should i deduct TDS @ reduced rate or normal rate?

  29. Divakaran says:

    TDS on fees is reduced to 7.5 percent, thereby the money come to the consultants hands. But what about the tax burden overall for the financial year. If the tax payer is 20 percent category, whether he has to pay 12.5 per cent taking into account the deduction of 7.5 percent. If it is so, at the end of the year he has to make more tax payments. Would it mean it is only postponement of the tax payment in the instant case. Pl.clarify.

    Regards
    Divakaran

  30. Manish says:

    Hi All,

    Few our vendors have raised today 14/05/ but for which services has already been received..So what @ rate TDS should be deducted…Normal rate or (Normal rate -25% of Normal rate)??

    Your valuable suggestion will be highly appreciated

  31. KS says:

    HI,
    At what rate TCS on coal is to be charged if party has provided lower rate certificate of 0.80%?? (Because old rate is 1% and new rate is 0.75%)

    Will your reply be different if lower certificate is with 0.20%?

  32. Ramu says:

    Sir, you mentioned that sec 206 C – TCS @0.1 % on sale of goods > 50 lakhs W.e.f 01.10.2020 – Can share the relevant notification of the same. Actually it is applicable from 01.04.2020 from Finance Act 2020.

  33. Latha says:

    tax collected at source rate will be reduced by 25 percent of the specified rates for the remaining period of FY 20-21 i.e. from 14.05.2020 to 31.03.2020
    i hope this should be till 31.03.2021

  34. himanshu shah says:

    reduced by 25 percent of the specified rates for the remaining period of FY 20-21 i.e. from 14.05.2020 to 31.03.2020.
    Pl. revise to 31.03.2021

  35. PAYEL MUKHERJEE says:

    Hi,
    please change the year in the below mentioned line given for your reference
    (FY 20-21 i.e. from 14.05.2020 to 31.03.2020).
    It will be 31.03.2021

  36. CA. M. Lakshmanan says:

    It is a futile exercise by the Ministry of finance and nothing but eye wash. Instead Deduction of 10% of Gross Total Income could have been given, which would have been a great relief for the suffering Income Tax Payers

  37. Rishikant Sharma says:

    Sanjay ji,

    Pls clarify.
    1) Bill dated & received on 15-04-2020. Credited in books and old TDS rates applied. Now making payment on 15-05-2020 then what about tds rate. Whether reduced or old rates to be applied!?

    2) On 31st March 2020, provisions of expenses made in books and old TDS rates applied and deposited. Now on bill receiving how to adjust the difference of tds.

    Thanks in advance..

  38. Kumar says:

    Hi Sanjay, Thank you for the valued information.

    Could you please let me what percentage of TDS to be ducted if one provided consultancy services for a full month in May -20?

    Do we need to deduct TDS @ 10% till 13-05-2020 thereafter, 7.5% from 14-05-2020 by split into the bill? Is the same theory applies to all the cases such as Contractors/Rent etc..?

    Kindly advice.

    Thank you,
    -Kumar

  39. Kumar says:

    Hi Sanjay, Thank you for the valued information.

    Could you please let me what percentage of TDS to be ducted if one provided consultancy services for a full month in May -20?

    Do we need to deduct TDS @ 10% till 13-05-2020 thereafter, 7.5% from 14-05-2020 by split into the bill? Is the same theory applies to all the cases such as Contractors/Rent etc..?

    Kindly advice.

    Thank you,
    -Sravan

  40. MOHITDASARDA says:

    Reduction in Rates of ‘Tax Deduction at Source’ and ‘Tax Collected at Source” – The TDS rates for all non-salaried payment to residents, and tax collected at source rate will be reduced by 25 percent of the specified rates for the remaining period of FY 20-21.

  41. Punit Vohra says:

    As per press release TCS on liquor for human consumption 206C not mentioned.
    Thus TCS old rate 1% shall apply.
    Correct if wrong?

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

May 2021
M T W T F S S
 12
3456789
10111213141516
17181920212223
24252627282930
31