<s>[INST] What are the payments covered under the TDS mechanism and the rates for deduction of tax at source? [/INST] ax is deductible at source at the rates given in table (infra). If PAN of the deductee is not intimated to the deductor, tax will be deducted at source by virtue of section ​206AA e​ither at the rate given in the table or at the rate or rates in force or at the rate of 20 per cent, whichever is higher. Further, under section 94A(5), if payment or credit is made or given to a deductee who is located in a notified jurisdictional area, tax is deductible at the rate given in the table or at the rate of 30 per cent, whichever is higher. TDS rates for the financial year 2020-21 are as follows—
CATEGORY A - WHEN RECIPIENT IS RESIDENT	​
Nature of payment	TDS (SC : Nil, EC : Nil, SHEC : Nil)
• Sec. ​192 - Payment of salary	Normal or Special Tax Rate plus surcharge and education cess
Surcharge: 10% (if total income exceeds Rs. 50 lakh but doesn’t exceed Rs. 1 crore), 15% (If total income exceeds Rs. 1 crore but doesn’t exceed Rs. 2 crore), 25% (If total income exceeds Rs. 2 crore but doesn’t exceed Rs. 5 crore), 37% (If total income exceeds Rs. 5 crore)
HEC : 4%
• Sec. ​192A - Payment of taxable accumulated balance of provident fund	10
• Sec. 193 - Interest on securities—	 
 a.  interest on (a) debentures/securities for money issued by or on behalf of any local authority/statutory corporation, (b) listed debentures of a company [not being listed securities in demat form], (c) any security of the Central or State Government [i.e., 8% Savings (taxable) Bonds, 2003 or 7.75% savings (Taxable) Bonds, 2018, but not any other Government security]	10
 b.  any other interest on securities (including interest on non-listed debentures)	10
• Sec. 194 - Dividend—	10
• Sec. 194A - Interest other than interest on securities	10
• Sec. 194B - Winnings from lottery or crossword puzzle or card game or other game of any sort or from gambling or betting of any form or nature whatsoever.	30
​• Sec. 194BA - Income by way of winnings from any online game	30
​​• Sec. 194BB - Winnings from horse races	30
• Sec. 194C - Payment or credit to a resident contractor/sub-contractor—	 
 a.  payment/credit to an individual or a Hindu undivided family	1
 b.  payment/credit to any person other than an individual or a Hindu undivided family	2
• Sec. 194D - Insurance commission	10
 -  if recipient is a resident (other than a company)	5
 -  if recipient is a domestic company	10​
​• Sec. 194DA - Payment in respect of life insurance policy	1
• Sec. 194EE - Payment in respect of deposits under National Savings Scheme, 1987	10
• Sec. 194F - Payment on account of repurchase of units of MF or UTI	20
• Sec. 194G - Commission on sale of lottery tickets	5
• Sec. 194H - Commission or brokerage	5
• Sec. 194-I - Rent—	 
 a.  rent of plant and machinery	2
 b.  rent of land or building or furniture or fitting	10
• Sec. 194-IA​ - Payment/credit of consideration to a resident transferor for transfer of any immovable property (other than rural agricultural land)	1
• Sec. 194-IB​ - Payment of rent by an individual or HUF not subjected to tax audit under Section 44AB	5
• Sec. 194-IC​ - Payment under Joint Development Agreement to a resident individual or HUF who transfers land or building as per such agreement	10
• Sec. 194J - Fees for professional or technical services.
Note: 2% if payee is engaged in the business of operation of call center	10
1.  sum paid or payable towards fees for technical services	2
 ii.  sum paid or payable towards royalty in the nature of consideration for sale, distribution or exhibition of cinematographic films;	2
iii.  Any other sum	10
Note: 2% if payee is engaged in the business of operation of call center	
• Sec. 194LA - Payment of compensation on acquisition of certain immovable property	10
• Sec. 194LBA(1) - Payment of the nature referred to in section 10(23FC) or section 10(23FC)(a) or section 10(23FCA) by business trust to resident unit holders	10
• Sec. 194LBB - Payment in respect of units of investment fund specified in section 115UB	10
• Sec. 194LBC(1) - Payment in respect of an investment in a securitisation trust specified in clause (d) of the Explanation occurring after section 115TCA (with effect from June 1, 2016)	-
section 194M – Payment of contractual work, commission (not being insurance commission referred to in section 194D), brokerage or professional fees, by an individual or a HUF not covered under section 194C, section 194H and 194J	5
section 194N – Payment in cash by banking company or co-op. bank or post office	2/5
section 194K – Income in respect of units payable to resident	10
Section 194P – Deduction of tax by specified bank in case of senior citizen having age of 75 or more	Tax on total income as per rate in force
Section 194Q – Payment to resident for purchase of goods of the aggregate value exceeding Rs. 50 lakhs	0.1 % exceeding Rs. 50 lakhs
Section 194R – Deduction of tax in case any benefit or perquisite is provided and aggregate value of such benefit/perquisite exceeds Rs. 20,000
Note: Benefit or perquisite should be arising from business or the exercise of a profession by such resident.

10%
Section 194S – Payment on transfer of Virtual Digital Asset	1%
CATEGORY B - WHEN RECIPIENT IS NON-RESIDENT OR FOREIGN COMPANY

Aggregate payment or credit subject to TDS during the financial year 2020-21 →	
If recipient is non-resident Individual/HUF/AOP/BOI/Artificial juridical person

 

​	​	If recipient is non-resident co-operative society/ firm	​	If recipient is non-domestic company	​	​
​	Rs.50 lakh or less	More than Rs. 50 lakh but not more than Rs. 1 crore	More than Rs. 1 crore	Rs. 1 crore or less	More than Rs. 1 crore	Rs. 1 crore or less	More than Rs. 1 crore but not more than Rs. 10 crore	More than Rs. 10 crore
Nature of payment	TDS (inclusive of SC:  Nil, Health & Education cess: 4%)	TDS (inclusive of SC:  10%, Health & Education cess: 4%)	TDS (inclusive of SC:  15%, Health & Education cess: 4%)	TDS (inclusive of SC: Nil, Health & Education cess: 4%)	TDS (inclusive of SC: 12%, Health & Education cess: 4%)	TDS (inclusive of SC: Nil, Health & Education cess: 4%)	TDS (inclusive of SC: 2%, Health & Education cess: 4%)	TDS (inclusive of SC: 5%, Health & Education cess: 4%)
• Sec. 192 - Payment of salary	Normal/Special Tax Rate	Normal Tax Rate  plus SC, EC and SHEC	Normal Tax Rate  plus SC, EC and SHEC	–	–	–	–	–
• Sec. 192A- Payment of taxable accumulated balance of provident fund
10.4	11.44	11.96	-	-	-	-	-
• Sec. 194B - Winnings from lottery or crossword puzzle or card game or other game of any sort or from gambling or betting of any form or nature whatsoever.
31.2	34.32	35.88	31.2	34.944	31.2	31.824	32.76
• Sec. 194BB - Winnings from horse races	31.2	34.32	35.88	31.2	34.944	31.2	31.824	32.76
​• Sec. 194BA - Income by way of winnings from any online game	31.2	34.32	35.88	31.2	34.944	31.2	31.824	32.76
• Sec. 194E - Payment to a non-resident foreign citizen sportsman/entertainer or non-resident sports association	20.8	22.88	23.92	20.8	23.296	20.8	21.216	21.84
• Sec. 194EE - Payment in respect of deposits under National Saving Scheme, 1987	10.4	11.44	11.96	NA	NA	NA	NA	NA
• Sec. 194F - Re-purchase of units of MF or UTI	20.8	22.88	23.92	NA	NA	NA	NA	NA
• Sec. 194G - Commission on sale of lottery tickets	5.2	5.72	5.98	5.2	5.824	5.2	5.304	5.46
• Sec. 194LB - Payment/credit by way of interest by infrastructure debt fund	5.2	5.72	5.98	5.2	5.824	5.2	5.302	5.46
• Sec. 194LBA(2) - Payment of the nature referred to in Section 10(23FC)(a)	5.2	5.72	5.98	5.2	5.824	5.2	5.304	5.46
• Sec. 194LBA(2) - Payment of the nature referred to in  Section 10(23FC)(b) 	10.4	11.44	11.96	10.4	11.65	10.4	10.61	10.92
• Sec. 194LBA(3) - Payment of the nature referred to  in section 10(23FCA) by business trust to unit holders	31.2
or
20.8*
* In case of distribution of dividend received from specified domestic company.	34.32
22.88	35.88
23.92	31.2
20.8	34.944
23.30	41.6
20.8	42.432
21.22	43.68
21.84
• Sec. 194LBB - Payment in respect of units of investment fund specified in Sec. 115UB              	31.2
or
20.8*
* In case of distribution of dividend received from specified domestic company.	34.32
22.88	35.88
23.92	31.2
20.8	34.944
23.30	41.6
23.8	42.432
21.22	43.68
21.84
• Sec. 194LBC(2) - Payment in respect of an investment in a securitisation trust specified in clause (d) of the Explanation occurring after section 115TCA (with effect from June 1, 2016)	31.2	34.32	35.88	31.2	34.944	41.6	42.432	43.68
• Sec. 194LC - Payment/credit of interest by an Indian specified company on foreign currency approved loan/long-term infrastructure bonds (with effect from October 1, 2014, any bond) from outside India	5.2
or
4.16 or 9.36***
* In case where interest is payable in respect of Long-term Bond or Rupee Denominated Bond listed on recognised stock exchange located in IFSC​
 ** Where money borrowed from a source outside India by issuing a long-term bond or rupee-denominated bond on or after 01-04-2023, which is listed only on a recognised stock exchange located in an IFSC	5.72
4.58 or 10.30	5.98
4.78 or 10.76	5.2
4.16 or 9.36	5.824
4.66 or 10.48	5.2
4.16 or 9.36	5.304
4.24 or 9.55	5.46
4.37 or 9.83
• Sec. 194LD - Interest on a rupee denominated bond of an Indian company or Government security (from June 1, 2013)	5.2	5.72	5.98	5.2	5.824	5.2	5.304	5.46
• Sec. 195 - Payment/credit of other sum to a non-resident —	 	 	 	 	 	 	 	 
a. income of foreign exchange assets payable to an Indian citizen	20.8	22.88	23.92	NA	NA	NA	NA	NA
b. income by way of long-term capital gains referred to in  section 115E or  section 112(1)(c)(iii)	10.4	11.44	11.96	10.4	11.648	10.4	10.608	10.92
c. income by way of long-term capital gains referred to in section 112A	10.4	11.44	11.96	10.4	11.648	10.4	10.608	10.92
d. short-term capital gains under • Sec. 111A	15.6	17.16	17.94	15.6	17.472	15.6	15.912	16.38
e. any other long-term capital gains [not being covered by  Section 10(33),  10(36) and  112A]	20.8	22.88	23.92	20.8	23.296	20.8	21.216	21.84
f. income by way of interest payable by Government/Indian concern on money borrowed or debt incurred by Government or Indian concern in foreign currency (not being interest referred to in • Sec. 194LB or• Sec. 194LC 	20.8	22.88	23.92	20.8	23.296	20.8	21.216	21.84
g. royalty [see Note 5]	10.4	11.44	11.96	10.4	11.648	
 

10.4

 

10.608

 

10.92

h. royalty [not being royalty of the nature referred to in (f) supra] [see Note 6] –	 	 	 	 	 	 	 	 
□ where the agreement is made after March 31, 1961 but before April 1, 1976	10.4	11.44	11.96	10.4	11.648	52	53.04	54.6
□where the agreement is made on or after April 1, 1976	10.4	11.44	11.96	10.4	11.648	
 

10.4

 

10.608

 

10.92

i. fees for technical services [see Note 7] –	 	 	 	 	 	 	 	 
□ where the agreement is made after February 29, 1964 but before April 1, 1976	10.4	11.44	11.96	10.4	11.648	51.52	53.04	54.6
□ where the agreement is made on or after April 1, 1976	10.4	11.44	11.96	10.4	11.648	
 

10.4

 

10.608

 

10.92

j. any other income	31.2	34.32	35.88	31.2	34.944	41.6	42.432	43.68
• Sec. 196B - Payment/credit of income from units (including long-term capital gains on transfer of such units) to an offshore fund	10.4	11.44	11.96	10.4	11.648	10.4	10.608	10.92
• Sec. 196C - Payment/credit of interest of foreign currency bonds or GDR (including long-term capital gains on transfer of such bonds)	10.4	11.44	11.96	10.4	11.648	10.4	10.608	10.92
• Sec. 196D - Payment/credit of income from securities (not being dividend, short-term or long-term capital gain) to Foreign Institutional Investors	20.8	22.88	23.92	20.8	23.296	20.8	21.216	21.84
Notes :

1. Under sections 192​ tax is deductible from salary. The payer shall calculate salary taxable in the hands of recipient. The amount so determined is subject to tax deduction under sections 192. Under sections 192A, tax is deductible on taxable accumulated balance of provident fund. Under section 195, tax is deductible only if income is taxable in the hands of recipient in India. In any other case, gross payment or credit (without GST, if GST is shown separately) is subject to tax deduction.

2. In Category B, tax is deductible at the above rates or the rates specified in ADT agreements entered into by the Central Government under section 90 (whichever is lower) [ section 2(37A)(iii)].

3. Tax is not deductible under section 192A, section 193, 194, 194A, with effect from 1/6/2017 194D, 194DA, 194-I, or 194EE if the recipient makes a declaration in Form No. 15G/15H under the provisions of section 197A.

4. Under section 197 the recipient can apply to the Assessing Officer in Form No. 13 to get a certificate of lower/no tax deduction. This benefit is, however, not available if tax is deductible under section 192A, section 194B, 194BB, 194E, 194EE, 194F, 194-IA, 194LBA, 194LB, 194LC, 196B, 196C or​196D​.

5. Royalty payable by Government or an Indian concern in pursuance of an agreement made by non-resident with the Government or the Indian concern after March 31, 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​section 115A(1A) to the Indian concern or in respect of computer software referred to in the second proviso to​section 115A(1A), to a person resident in India.

6. Not being royalty of the nature referred to above, payable by Government or an Indian concern in pursuance of an agreement made by non-resident 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 matter included in the industrial policy, the agreement is in accordance with that policy.

7. Fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by non-resident 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 matter included in the industrial policy, the agreement is in accordance with that policy.​ </s>