Heading towards the next section, in the series of TDS articles, the present article covers the rarely touched section 194E of the Income Tax Act, 1961. Section 194E deals with the provisions of TDS deduction on payment to a non-resident sportsmen / sports association. Let us have a look into the provisions governing the same.

Understanding the basic provisions of section 194E

As per section 194E of the Income Tax Act, 1961, any person making payment of income referred to in section 115BBA of the Income Tax Act, 1961 to the following persons shall be liable to deduct TDS –

  • A non-resident sportsman (including an athlete); or
  • An entertainer who is not a citizen of India; or
  • A non-resident sports association / institution.

Time of deduction of TDS under section 194E

If the provisions of section 194E of the Income Tax Act, 1961 gets attracted in a given transaction, then, the Deductor is required to deduct TDS within earlier of the following dates –

  • At the time of payment in cheque, draft, cash or any other mode; or
  • At the time of credit of the income to the account of the recipient.

The Rate at which TDS under section 194E is to be deducted

The Deductor liable to deduct TDS under section 194E is required to deduct TDS @ 20%.

TDS return filing –

The Deductor, under section 194E of the Income Tax Act, 1961, is required to furnish TDS return in Form 27Q. The TDS return in form 27Q is to be filed on a quarterly basis within the following prescribed due dates –

1. April to June – 31st July

2. July to September – 31st October

3. October to December – 31st January

4. January to March – 31st May

Issuance of TDS certificate –

Provisions of section 203 of the Income Tax Act, 1961 makes it mandatory for the Deductor to issue the TDS certificate to the payee. The Deductor deducting TDS under section 194E is required to furnish TDS certificate in Form 16A within the following prescribed dates –

1. April to June – 15th August

2. July to September – 15th November

3. October to December – 15th February

4. January to March – 15th June

Also Read-

Particulars
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 194DA – TDS in respect of Life Insurance Policy
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
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