Section 194DA relates to the deduction of TDS in respect of life insurance policy, and the provisions of the same are covered under the present article.
Basic provisions of section 19DA
Section 194DA of the Income Tax Act, 1961 covers the person making payment to a resident person any sum under the life insurance policy. It is important to note that section 194DA includes the sum allocated by way of bonus.
Rate of TDS under section 194DA of the Income Tax Act, 1961
The Deductor, liable to deduct TDS as per provisions of section 194DA of the Income Tax Act, 1961, is required to deduct TDS @ 1%.
However, in the Union Budget, 2019, it has been proposed to increase the rate of TDS deduction from 1% to 5% and the same would be effective from 1st September 2019.
In case the PAN is not furnished, the Deductor is liable to deduct TDS at maximum marginal rate i.e. 20%.
Time of deduction of TDS –
As per provisions of section 194DA, the Deductor is required to deduct TDS at the time of payment.
Cases wherein TDS is not deductible –
Various due dates –
1. Due date of deposit of TDS with the Government –
The Deductor is required to deposit the deducted TDS within a period of 7 days from the end of the month in which the TDS is deducted.
However, in the case of TDS deducted in the month of March, the same is to be deposited on or before 30th April.
2. Return filing due dates
The Deductor is required to file quarterly TDS return in Form 26Q within following dates –
3. Issuance of TDS certificate
The Deductor is required to issue TDS certificate in Form 16A within a period of 15 days of the filing of the quarterly TDS return. The respective due dates would be –
|TCS – Tax Collection at Source – A Complete Guide|
|TDS Rate Chart for Financial Year 2019-2020|
|Section 192 – TDS on Salary|
|Section 192A – TDS on Premature withdrawal from EPF|
|Section 193: TDS on Interest on Securities|
|Section 194 – TDS on dividend|
|Section 194A: TDS on interest other than interest on securities|
|Section 194B and Section 194BB – TDS|
|Section 194C – TDS on Contractors|
|Section 194D – TDS on insurance commission|
|Section 194E – TDS on payment to Non-resident Sportsmen or Sports Association|
|TDS under Section 194EE and Section 194F|
|Section 194G TDS on Commission on Sale of Lottery Tickets|
|Section 194H – TDS on Commission or Brokerage|
|Section 194I of Income Tax Act, 1961 – TDS on Rent|
|Section 194IA TDS on transfer of immovable property|
|Section 194IB – TDS on Rent paid by Individual / HUF|
|Section 194LA: Payment of Compensation on acquisition of certain immovable property|
|TDS under Section 194LB, 194LBA, 194LBB and 194LBC|
|Section 194LC: TDS on income by way of interest from an Indian Company or a business trust|
|Section 194LD TDS on income by way of interest on certain bonds and Government Securities|
|Section 194J TDS on Fees for Professional or Technical Services|
|Section 194N – TDS on Cash Withdrawals|
|Section 194M: TDS on Payment of certain sum by certain Individual / HUF|
|Section 195 TDS on payment of any other sum to a non-resident|