TDS Rates Chart for FY 2016-17 / AY 2017-18

CA Sandeep Kanoi

TDS/TCS Rates Chart for Financial Year 2016-17/ Assessment Year 2017-18 vide Finance Act 2016 i.e Budget 2016-17.We have updated the TDS rate chart considering the amendments made by Finance Act, 2015. Some of these amendments takes effect from 01.04.2016 and other have taken effect from 01.06.2016.

Budget 2016 has effected Increase in threshold limit of TDS deduction on various payments, Revision in rates of deduction of tax at source on various payments and also omitted Certain non-operational provisions. In this Article we have Compiled TDS/TCS Chart fro Financial Year 2016-17 /Assessment Year 2017-18 including TDS/TCS rate for the period from 01.04.2016 to 31.05.2016 and TDS/TCS Rate from 01.06.2016.

Tax Deducted at Source (TDS) Rate Chart/Slab for Financial Year (FY) 2016-17 / Assessment Year (AY) 2017-18

Section	Nature of income	When to deduct	Rate of TDS
192	Salary	Monthly- at the time of payment where estimated yearly net taxable salary exceeds tax free limit.	On the average rates on the basis of per rates for individuals. (30% if no Valid PAN)
192A	Payment of accumulated balance due of Employees’ Provident Fund Scheme, 1952, to Employess which is taxable in their hand (w.e.f 01-06-15)	when the amount of payment or aggregate amount of payment exceeds Rs. 30,000/-Thrashhold Limit Increased to Rs. 50,000/- from 01.06.2016	10% (30% if no Valid PAN)
193 (See note- 1 )*	Interest on securities* a) any debentures or securities for money issued by or on behalf of any local authority or a corporation established by a Central, State or Provincial Act; b) any debentures issued by a company where such debentures are listed on a recognised stock exchange in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and any rules made thereunder; c) any security of the Central or State Government; d) interest on any other security	At the time of credit or payment, whichever is earlier, when the amount exceeds Rs. 10,000/-In case of Debentures Threshold limit is Rs. 5000/-	10% (20% if no Valid PAN)
194	Dividend other than the dividend as referred to in Section 115-O	Before making payment to’ shareholder, other than dividend declared U/s. 115-0, when amount exceeds Rs. 2,500/-	10% (20% if no Valid PAN)
194A (See note- 2 to 5)*	Interest other than “Interest on securities”	At the time of credit or payment, whichever is earlier, when the amount exceeds Rs. 5,000/-. However, limit is Rs. 10,000/- in case of interest credited by banks including co‑operative banks to its members.	10% (20% if no Valid PAN)
194B /194BB	Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort and Income by way of winnings from horse races	Winning from Lotteries 5000 (1-April-2016 to 31-May-2016) 10000 (1-Jun-2016 to 31-Mar-2017) HORSE RACE 5000 (1-April-2016 to 31-May-2016) 10000 (1-Jun-2016 to 31-Mar-2017)	30% (30% if no Valid PAN)
194C (See note- 6)*	Payment to contractors/ sub- contractors	At the time of credit or payment, whichever is earlier, when the amount of a  particular contract exceeds Rs. 30,000/- or the total amount of contract during the whole year exceeds Rs. 75,000/- (Increased to Rs. 1 Lakh wef 01.06.2016)	2% – For payments to contractor/Sub-contractor who is not an Individual/HUF(20% if no Valid PAN)
			1% – For payment to contractor/Sub-contractor who is an Individual/HUF(20% if no Valid PAN)
194D	Insurance Commission	At the time of credit or payment, whichever is earlier when the amount exceeds Rs. 20000 (1-April-2016 to 31-May-2016) or Rs. 15000 (1-June-2016 to 31-Mar-2017)	10% from 01.04.2016 to 31.05.2016 5% wef 01.06.2016) (20% if no Valid PAN)
194DA	Payment under life insurance policy (including Bonus)	At the time of payment when the amount or the total amount during the whole year exceeds Rs. 1 ,00,000/-	2% (1% wef 01.06.2016) (20% if no Valid PAN)
194E	Payment to Non-Resident Sportsmen or Sports Association	At the time of credit or payment, whichever is earlier	20% (20% if no Valid PAN)
194EE	Payment in respect of deposit under National Savings scheme (NSS)	At the time of credit or payment, whichever is earlier when the amount exceeds Rs. 2500/-	20% (1-April-2016 to 31-May-2016) 10% (1-Jun-2016 to 31-Mar-2017) (20% if no Valid PAN)
194F	Payment on account of repurchase of unit by Mutual Fund or Unit Trust of India	At the time of credit or payment, whichever is earlier	20% (20% if no Valid PAN)
194G	Commission on sale of lottery tickets	At the time of credit or payment, whichever is earlier when the amount exceeds Rs. 1,000/- (1-April-2016 to 31-May-2016) or Rs. 15000 wef. 1st June-2016	10%  from 01.04.2016 to 31.05.2016 5% wef 01.06.2016) (20% if no Valid PAN)
194H	TDS on Payment of commission or brokerage for  FY 2016-17 / AY 2017-18	At the time of credit or payment whichever is earlier when the amount exceeds Rs. 5000/- (Rs. 15000 WEF 1-June-2016)	10%  from 01.04.2016 to 31.05.2016 5% wef 01.06.2016) (20% if no Valid PAN)
194I (See note-7)	Rent	At the time of credit or payment, whichever is earlier, when the amount exceeds Rs. 1,80,000/-	10% – If rent is for land, building or furniture(20% if no Valid PAN)
			2% – If the rent is for Machinery, Plant or Equipment(20% if no Valid PAN)
194IA ((See note-8)	Payment on transfer of certain immovable property other than agriculture land.	At the time of credit or payment, whichever is earlier, when the land is situated in specified area when amount exceeds Rs. 50 lacs	1% (20% if no Valid PAN)
194J	Any sum paid by way of  a) Fee for professional services, b) Fee for technical services c) Royalty, d)  Remuneration/fee/commission to a director or e) For not carrying out any activity in relation to any business f) For not sharing any know-how, patent, copyright etc.	At the time of credit or payment, whichever is earlier, when the amount exceeds Rs. 30,000/-	10% (20% if no Valid PAN)
194K	Income in respect of Units	Omitted w.e.f  01.06.2016 as Section was non-operational.
194L	Payment of Compensation on acquisition of Capital Asset	Omitted w.e.f  01.06.2016 as Section was non-operational
194LA	Payment on transfer of certain immovable property other than agricultural land	At the time of credit or payment whichever is earlier if amount exceeds Rs. 200000  between 1-April-2016 to 31-May-2016 or Rs. 250000 after 1-June-2016	10% (20% if no Valid PAN)
194LB	Payment of interest on infrastructure debt fund to non-resident or foreign company	At the time of credit or payment whichever is earlier	5%# (20% if no Valid PAN)
Sec 194LBC	Income in respect of investment in securitisation trust. (From 01.06.2016)	25% For Residents individual or HUFs and 30% For other Residents 40% For Non Residents Companies and 30% For Non Residents other than Company
194LBA	Certain income from units of a business trust(applicable from 01.10.2014	At the time of credit or payment whichever is earlier	10% # (20% if no Valid PAN)
194LBA	194LBA – Certain income from units of a business trust to non-resident (applicable from 01.10.2014)	At the time of credit or payment whichever is earlier	5%# (20% if no Valid PAN)
194LBB (See note-10)	Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)] shall deduct tax therefrom (with effect from 01.06.2015).	At the time of credit or payment whichever is earlier	10% from 1-April-2016 to 31-May-2016 40% For Non Residents (1-Jun-2016 to 31-Mar-2017) 30 % For Non Residents (1-Jun-2016 to 31-Mar-2017) (20%  or Rate Applicable whichever is higher if no Valid PAN)
194LC	Payment of interest by an Indian Company or a business trust in respect of money borrowed in foreign currency under a loan agreement or by way of issue of long-term bonds (including long-term infrastructure bond)	At the time of credit or payment whichever is earlier	5%#
194LD (See note-9)	Payment of interest on rupee denominated bond of an Indian Company or Government securities to a Foreign Institutional Investor or a Qualified Foreign Investor	At the time of credit or payment whichever is earlier	5%#
195	Other Sums	At the time of credit or payment whichever is earlier	Average rates as applicable (See Note 17& 18)
196A	Foreign comp unit holder of MF	At the time of credit or payment whichever is earlier	10 %  In case of a Company   20% In the case of a person other than a company
196B –	Income from units (including long-term capital gain on transfer of such units) to an offshore fund	At the time of credit or payment whichever is earlier	10% (20% if no Valid PAN)
196C	Income from foreign currency bonds or GDR (including long-term capital gains on transfer of such bonds) (not being dividend)	At the time of credit or payment whichever is earlier	10% (20% if no Valid PAN)
196D	Income of FIIs from securities	At the time of credit or payment whichever is earlier	20% (20% if no Valid PAN)

# Surcharge, education cess and secondary and higher education cess will be added to the above tax rate, as applicable.

Notes:

1. Securities includes listed as well as unlisted debentures issued by companies in which public are substantially interested.

2. In case of interest payment on time deposits  by co-operative banks to its members the TDS Provision is applicable from 1-6-2015.

3. TDS provisions under Section 194A shall not apply to income paid by way of interest on the compensation amount awarded by the Motor Accidents Claims Tribunal where the amount of such income does not exceed Rs. 50000/- and further TDS on interest payment on compensation amount awarded by Motor Accident Claim Tribunal is deductible at the time of payment instead of accrual  (WEF 01.06.2015)- Section 194A- Amendment in provisions related to TDS on interest

4. As per amended definition of ‘time deposits’ under section 194(3) it now includes include recurring deposits also. This implies that now, interest on recurring deposits is also subject to TDS.

5.  Bankwise Income to be considered for TDS deduction on time deposits instead of Branch- Section 194A- Amendment in provisions related to TDS on interest

6. a) From 01.06.2015 – If the payment is made to contractor/sub contractor in transport business, no TDS shall be deducted at source in the course of payment for plying, hiring or leasing goods carriages if the contractor provides PAN Number and such contractor owns ten or less goods carriage at any time during the previous year and furnishes a declaration to that effect. (WEF 01.06.2015)-  TDS deductible on Payment to Transporters owing more than 10 goods carriage

b) Up to 31.05.2015– No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages on furnishing of his Permanent Account Number, to the person paying or crediting such sum.

7. No TDS deduction shall be made under section 194-I of the Act where the income by way of rent is credited or paid to a business trust, being a real estate investment trust (REIT), in respect of any real estate asset held directly by such REIT.  (wef 01-04-2015)  – Read More-Tax Regime for Real Estate Investment Trusts and Infrastructure Investment Trusts

8. In case of section 194LA, the sub-registrar shall register the document only after the challan for payment of TDS is presented before him.

9. Concessional rate of 5% withholding tax on interest payment under  section 194LD  will now be available on interest payable upto 30th June, 2017. – Extension of eligible period of concessional tax rate U/s. 194LD

10. TDS on Income in respect of units of investment fund- New section 194LBB to provide for TDS @ 10% on payments to a unit holder in respect of units of Investment Fund u/s 115UB  – Pass through status to Category –I and II Alternative Investment Funds

11. Section 195 has been amended to provide furnishing of information in Form 15CA and 15CB for payments to a non resident/foreign company irrespective to the fact that whether or not those payments were chargeable under Income tax Act. (wef 01-06-2015)  – Rationalisation of provisions relating to TDS and TCS

12. If the payment is made to a person (including non resident) whose receipts are subject to TDS shall mandatory furnish his PAN to the deductor (even though the deductee file a declaration in form no. 15G or 15H) otherwise the deductor shall deduct the TDS at higher of the following rates-

– The applicable rate prescribed in the Act or

– The rate mentioned in the Finance Act or

– 20%

13.  Surcharge on TDS on payments made to non-resident person and company other than a domestic company

a) Surcharge Rate (%)

Non Residents other than company (if income exceeds Rs.1 Crore)	15%
Non Resident companies if income is between Rs.1 Crore and 10 Crore	2%
Non Resident companies if income is greater than Rs.10 Crore	5%
Surcharge on Coperative Society & Firms in case of Non-Residents(if income exceeds Rs. 1 crore)	12%

b)  Surcharge on tax is not deductible/collectible at source in case of  resident individual/ HUF /Firm/LLP/ AOP / BOI/Domestic Company in respect of payment of income other than salary.

14. Education Cess on payments made to non-resident person and company other than a domestic company

a) Non Resident & Foreign Companies– “Education Cess on income-tax” and “Secondary and Higher Education Cess on income-tax” shall continue to be levied at the rate of two per cent. and one per cent. respectively, of income tax including surcharge wherever applicable.

b) Other Resident Assessees-  Education Cess is not deductible/collectible at source in case of resident Individual/HUF/Firm/ AOP/ BOI/ Domestic Company in respect of payment of income other than salary.Education Cess @ 2% plus secondary & Higher Education Cess @ 1% is deductible at source in case of non-residents and foreign company.

15. NO TDS on service tax component comprised in the payments made to residents – Circular No. 1/2014 , Dated 13-1-2014

16. Amendment in TDS Rates & Threshold limit wef 01.06.2016

17. Deduction under Section 195 of Income Tax Act, 1961, In the case of a person other than a company who is not resident in India-

Section 195: Payment of any other sum to a Non-resident	TDS Rate
a) Income in respect of investment made by a Non-resident Indian Citizen	20
b) Income by way of long-term capital gains referred to in Section 115E in case of a Non-resident Indian Citizen	10
c) Income by way of long-term capital gains referred to in sub-clause (iii) of clause (c) of sub-Section (1) of Section 112	10
d) Income by way of short-term capital gains referred to in Section 111A	15
e) Any other income by way of long-term capital gains [not being long-term capital gains referred to in clauses (33), (36) and (38) of Section 10]	20
f) Income by way of interest payable by Government or an Indian concern on moneys borrowed or debt incurred by Government or the Indian concern in foreign currency (not being income by way of interest referred to in Section 194LB or Section 194LC)	20
g) Income by way of royalty payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern where such royalty is in consideration for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book on a subject referred to in the first proviso to sub-section (1A) of Section 115A of the Income-tax Act, to the Indian concern, or in respect of any computer software referred to in the second proviso to sub-section (1A) of Section 115A of the Income-tax Act, to a person resident in India	10
h) Income by way of royalty [not being royalty of the nature referred to point g) above E] payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy	10
i) Income by way of fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy	10
j) Any other income	30

18. Deduction under Section 195 of Income Tax Act, 1961, where the company is not a domestic company-

Section 195: Payment of any other sum	TDS Rate
a) Income by way of long-term capital gains referred to in sub-clause (iii) of clause (c) of sub-section (1) of Section 112	10
b) Income by way of short-term capital gains referred to in Section 111A	15
c) Any other income by way of long-term capital gains [not being long-term capital gains referred to in clauses (33), (36) and (38) of Section 10]	20
d) Income by way of interest payable by Government or an Indian concern on moneys borrowed or debt incurred by Government or the Indian concern in foreign currency (not being income by way of interest referred to in Section 194LB or Section 194LC)	20
e) Income by way of royalty payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March, 1976 where such royalty is in consideration for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book on a subject referred to in the first proviso to sub-section (1A) of Section 115A of the Income-tax Act, to the Indian concern, or in respect of any computer software referred to in the second proviso to sub-section (1A) of Section 115A of the Income-tax Act, to a person resident in India	10
f) Income by way of royalty [not being royalty of the nature referred to in point e) above C] payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy—
A. where the agreement is made after the 31st day of March, 1961 but before the 1st day of April, 1976	50
B. where the agreement is made after the 31st day of March, 1976	10
g) Income by way of fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy—
A. where the agreement is made after the 29th day of February, 1964 but before the 1st day of April, 1976	50
B. where the agreement is made after the 31st day of March, 1976	10
h) Any other income	4

(Diclaimer- We have taken all the effort to make the information 100% accurate but readers are requested to verify at their end with Relevant Acts and Rules before replying on above. In case of any discrepancy the same can be informed to us through comment at the end of article or by sending an email at info @taxguru.in )