c

Any entity making the payments specified under the Income Tax Act, 1961, needs to deduct TDS. The exception to this includes individuals and HUFs whose books are not required to be audited as per the Act. So, if you are required to deduct and deposit TDS, you need to know the rates at which the tax needs to be deducted.

This is necessary because the rates vary based on the kind of payment being made. For instance, the rate for TDS on salary is different from the rate for TDS on freight. Additionally, the rates of TDS are also different for residents, non-resident Indians and companies.

Reduction in TDS for FY 2020-21 due to COVID-19

TDS Rate Chart for TDS on all things

On account of the coronavirus pandemic, the government of India provided some relief by lowering the TDS rates for the period from May 14, 2020 to March 31, 2021. Here is a TDS rate chart showing the regular TDS rates as well as the revised TDS rates applicable for residents of India (other than companies).

Section of the Income Tax Act, 1961 Particulars Normal TDS rate (%) from 01.04.2021 Revised TDS rate  (%)  (From May 14, 2020 to March 31, 2021)
192 Payment of salary 10 10
192A Premature EPF withdrawal 10 10
193 Interest on securities 10 7.5
194 Dividend 10 7.5
194A Interest other than interest on securities 10 7.5
194B Winnings from lotteries, crossword puzzles, and other games 30 30
194B Winnings from horse races 30 30
194C Payments to contractors and sub-contractors who are individuals or HUFs 1 0.75
194C Payments to contractors and sub-contractors other than individuals or HUFs 2 1.50
194D Commission from insurance 5 3.75
194DA Payment received on maturity of a life insurance policy 5 3.75
194EE Payment from National Savings Scheme 10 7.5
194F Payment due to repurchase of a unit by Mutual Fund or Unit Trust of India 20 15
194G Commission from the sale of lottery tickets 5 3.75
194H Other commission and brokerage 5 3.75
194I Rent received on rental of plant and machinery 2 1.5
194I Rent received on rental of land, building or furniture and fittings 10 7.5
194-IA Payments on transfer of immovable property (except agricultural land) 1 0.75
194-IB Rent payable by an individual or HUF, not covered under section 194I 5 3.75
194-IC Payments to an individual or a HUF under a Joint Development Agreement 10 7.5
194J Fees for professional or technical services:    
i) sum paid or payable towards fees for technical services 2% 1.50%
ii) sum paid or payable towards royalty in the nature of consideration for sale, distribution or exhibition of cinematographic films; 2% 1.50%
iii) Any other sum 10% 7.50%
194K Any payments made with respect to units of a mutual fund, units from the administrator, or units from a specified company 10 7.5
194LA Compensation paid for acquisition of immovable property 10 7.5
194LBA Income paid by a business trust to its unit holders 10 7.5
194LBB Income paid by investment funds to its investors 10 7.5
194LBC Income paid to an investor (individual or HUF) on account of investment in a securitization trust 25 18.75
194LBC Income paid to an investor (other than individual or HUF) on account of investment in a securitization trust 30 22.50
194M Payments (made by individuals) not covered under u/s 194C, 194J and 194H, provided such payments exceed Rs. 50 lakhs 5 3.75
194N Payments to e-commerce operators for goods or services that they facilitate via digital or electronic platforms 0.75

Shown below is the TDS rate chart that is applicable to Non-Resident Indians (NRIs).

Section of the Income Tax Act, 1961 Particulars Normal TDS rate (%) from 01.04.2021
Revised TDS rate  (%) 

(From May 14, 2020 to March 31, 2021)

192 Payment of salary 10 10
192A Premature EPF withdrawal 10 10
193 Interest on securities 10 7.5
194 Dividend 10 7.5
194B Winnings from lotteries, crossword puzzles, and other games 30 30
194BB Winnings from horse races 30 30
194E Payment made to non-resident sportspersons 20 20
194EE Payment from National Savings Scheme 10 10
194F Payment due to repurchase of a unit by Mutual Fund or Unit Trust of India 20 20
194G Commission from the sale of lottery tickets 5 5
194LB Payment of interest from infrastructure debt funds 5 5
194LBA Income paid by a business trust to its unit holders 5 5
194LBC Income paid to an investor (individual or HUF) on account of investment in a securitization trust 30 30
194LC Interest payments by an Indian company with regard to money borrowed in foreign currency 5 5
194LD Interest payments on rupee-denominated bonds to Foreign Institutional Investors 5 5

Conclusion

The TDS rate chart given above should give you a better idea of the TDS rates applicable on different kinds of specified payments. If you are a recipient or a payer making any payments that require TDS to be deducted at source, make sure that you keep an eye out for the latest rates notified by the Government of India.

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One Comment

  1. RAMAMOORTHY NARAYANA SWAMY IYER says:

    I would like to have a format of Income Tax Computation for Housing Societies registered under MSC Act, 1960. It’ll be appreciated if you can email the sample computation to my email : nrama62 @ gmail.com

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