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Complete analysis-TDS Rates & Provisions for F.Y.2018-19

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Complete analysis-TDS Rates & Provisions for F.Y.2018-19
By: Sandeep Rawat
September 13, 2018
  • Contents

TDS stands for tax deducted at source. As per the Income Tax Act, any company or person making a payment is required to deduct tax at source if the payment exceeds certain threshold limits. TDS has to be deducted at the rates prescribed by the tax department.

The company or person that makes the payment after deducting TDS is called a deductor and the company or person receiving the payment is called the deductee. It is the deductor’s responsibility to deduct TDS before making the payment and deposit the same with the government. TDS is deducted irrespective of the mode of payment–cash, cheque or credit–and is linked to the PAN of the deductor and deductee.

TDS is deducted on the following types of payments:

  • Salaries
  • Interest payable by Assessee
  • Rent payments
  • Consultation fees
  • Professional fees

The Assessee is mandatorily required to deduct tax at source (“TDS”) in applicable cases on various payments (by way of salaries, payment to vendors, rent, etc.) and deposit the same with the Government, within the stipulated time. A short deduction of TDS or non-deduction results in the Assessee being treated as an ‘assessee-in-default’ and consequently, the Assessee is liable for payment of interest on TDS, penalty, etc. Also, such payments are disallowed as a deduction under the Income-tax Act, 1961 where there is a default in deduction and/or deposit of TDS.

  1. Finance Act, 2018 has brought some minor changes in the TDS provisions. For your ready reference, TDS rate chart for FY 2018-19 is provided below:
  1. Commonly used TDS Provision for payments made to persons resident in India (Individuals, Firms, Companies, etc.):-

Section

Nature of Payment for Domestic Transactions

Threshold Limit

Individual / HUF

Others

15G-15H

   

Rs.

TDS Rate (%)

Allowed

192

Salaries (Annexure-I)

-

As per income tax slabs

-

NO

193

Interest on Securities

10000

10

10

YES

194A

Interest to other than Resident

Senior Citizen

10000

10

10

YES

194A

Interest to Resident Senior Citizen

50000

10

10

YES

194C

Contractor - Single Transaction

30000

1

2

NO

194C

Contractor – Aggregated Transaction

during the F.Y.

100000

1

2

NO

194H

Commission / Brokerage

15000

5

5

NO

194I

Rent of Land and Building - F&F

180000

10

10

YES

194I

Rent of Plant / Machinery / Equipment

180000

2

2

YES

194IA

Transfer of certain immovable property other

than agriculture land

5000000

1

1

NO

194J

Professional Fees / Technical Fees / etc.

30000

10

10

NO

194J

Payment to Call Centre Operator

(w.e.f. 01.06.2017)

30000

2

2

NO

Conditions for being a resident senior citizen:

  1. Individual of 60 years or more at any time during the year
  1. An individual is said to be resident in any previous year if he satisfies any one of the following conditions:

a. He stays in India in the relevant previous year for a period of 182 days or,

b. He stays in India for at least 60 days during the relevant previous year and at least 365 days for 4 years preceding that previous year.

  1. Other TDS Provision for payments made to persons resident in India (Individuals, Firms, Companies, etc.)

Section

Nature of Payment for Domestic Transactions

Threshold Limit

Individual / HUF

Others

15G-15H

   

Rs.

TDS Rate (%)

 

Allowed

192A

Premature withdrawal from EPF

5000

10

-

YES

194

Dividends

2500

10

10

YES

194B

Winning from Lotteries

10000

30

30

NO

194BB

Winning from Horse Races

10000

30

30

NO

194D

Insurance Commission

15000

5

10

YES

194DA

Life insurance Policy

100000

1

1

YES

194E

Non-Resident Sportsmen or Sports Association

 

20

20

NO

194EE

NSS

2500

10

10

YES

194F

Repurchase Units by MFs

 

20

20

NO

194G

Commission - Lottery

15000

5

5

NO

194IB

Rent by Individual / HUF

(w.e.f. 01.06.2017)

50000/PM

5

-

NO

194LA

Compensation on transfer of certain immovable

property other than agricultural land

250000

10

10

NO

194LA

Immovable Property (TDS exempted under

RFCTLARR Act (w.e.f. 01.04.2017)

-

-

-

NO

194LB

Income by way of interest from infrastructure

debt fund (non- resident)

-

5

5

NO

194LC

Income by way of interest by an Indian specified

company to a  non-resident / foreign company on

foreign currency approved loan / long-term

infrastructure bonds from outside India

(applicable from July 1, 2012)

-

5

5

NO

194LD

Interest on certain bonds and Govt. Securities

(from 01-06-2013)

-

5

5

NO

Notes:

a) No TDS on Goods & Service Tax: As per circular no. 23/2017 dated 19.07.2017 of CBEC, TDS is not applicable on Goods and Service Tax (GST) where GST is shown separately.

b) No Surcharge, Health & Education Cess is not deductible on payments made to residents, other than salary

c) Deduction of TDS at a lower rate or non-deduction of TDS:

i) Deduction of TDS at a lower rate:

In case where a certificate for deduction of TDS at a lower rate u/s. 197 is obtained from the customer/ vendor, it should be confirmed whether the amount of payment is within the limit and valid for the period specified in the certificate u/s. 197 along with the certificate no. using the ‘197 Validation’ facility on the TRACES website.

ii) Non-deduction of TDS:

Please note that Form No. 15G can be accepted by the Assessee only when the total interest amount payable is less than the minimum exemption limit, which is ₹ 2,50,000 for financial year 2018-19. In case the same exceeds the above limit, then TDS is to be deducted as per the applicable provisions.

In case of Form No. 15H, the same is not acceptable if the total taxable income of the customer/ vendor including the interest income after claiming deductions under chapter VI(A) exceeds the minimum exemption limit, which is ₹ 3,00,000 for senior citizen/ ₹ 5,00,000 for super senior citizen for financial year 2018-19.

d) TDS at higher rate: If a person fails to furnish PAN to the Assessee whose receipts are  subject to TDS, then, the TDS is to be deducted at higher of the following rates”

       i) The rates in force or

       ii) 20%

Exemption for deduction of TDS at a lower rate or non-deduction of TDS as discussed in Point 1-C is not admissible in case of Invalid PAN/ No-PAN.

e) TDS on Good Transport: TDS shall be applicable on payment to transporters, i.e., contractors in the business of plying, hiring or leasing goods carriages. However, TDS exemption will be available to transporter owning 10 (ten) or less goods carriage at any time during the previous year. For claiming such exemption, transporter would also need to furnish a declaration to the Assessee along with a copy of PAN. For transporter not covered above, TDS is to be deducted at normal rates as given in above table.

f) TDS on interest u/s 194A paid to resident senior citizen: Finance Act, 2018 has increased the threshold limit u/s section 194A of the Income Tax Act, 1961 for “resident” Senior Citizens to ₹ 50,000/-.

2) Due dates for deposit/remittance of TDS to Central Government are as under:

Other than Section 194IA/194IB

  • For the months of April to February (Monthly) – on or before 7th day from the end of the month in which tax is deducted.
  • For the month of March –  30th April

Section 194IA/194IB

  • For any month – on or before 30th day from the end of the month in which tax is deducted.

3)  Interest on non-deduction/ non-payment of TDS:

As per Sec. 201(1A) of the Income-tax Act, 1961, if the Assessee does not deduct the whole or any part of the TDS or after deducting fails to pay the TDS as required by or under the Act, then the Assessee is liable to pay simple interest on the amount of such TDS, for every month or part of a month, at the rate of:

  • 1% from the date on which such TDS was deductible up to the date on which such TDS is deducted; and
  • 1.5% from the date on which such TDS was deducted up to the date on which such TDS is paid

4)  Late filing Levy:

As per Sec 234E of Income tax Act 1961, where a person fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C, he shall be liable to pay, by way of fee, a sum of two hundred rupees for every day during which the failure continues, maximum to the amount of tax deducted.

5) Due dates for filing of e-TDS returns & issue of TDS certificates:

a) In respect of any other TDS (other than TDS u/s. 194-IA):

Quarter

Period

Due Date for filing of

e-TDS Return

Due Date for issuing TDS

certificate [in Form no. 16A]

Q-1

1st April to 30th June

31st July

15th August

Q-2

1st July to 30th September

31st October

15th November

Q-3

1st October to 31st December

31st January

15th February

Q-4

1st January to 31st March

31st May

15th June

b) In respect of TDS u/s 194IA

i) A challan-cum-statement in Form No.26QB is to be filed within 30 days from the end of the month in which the deduction is made

ii) TDS certificate in Form no.16B is to be issued to the payee within 15 days from due date of furnishing statement in Form no. 26QB

c) In respect of TDS u/s 194IB

i) A challan-cum-statement in Form No.26QC is to be filed within 30 days from the end of the month in which the deduction is made

ii) TDS certificate in Form no.16C is to be issued to the payee within 15 days from due date of furnishing statement in Form no. 26QC

Annexure-I

TAX SLABS FOR FY 2018-19 AY 2019-20

  1. Income Tax Slab for Individual Tax Payers & HUF (Less Than 60 Years Old)

Income Tax Slab

Tax Rate

Income up to ₹ 2,50,000

No tax

Income from ₹ 2,50,000 – ₹ 5,00,000

5%

Income from ₹ 5,00,000– 10,00,000

20%

Income more than ₹ 10,00,000

30%

Surcharge: 10% of income tax, where total income exceeds ₹ 50 lakh up to ₹ 1 crore.

Surcharge: 15% of income tax, where the total income exceeds ₹ 1 crore.

Health & Education Cess: 4% of Income Tax.

  1. Income Tax Slab for Senior Citizens (60 Years Old or More but Less than 80 Years Old)

Income Tax Slab

Tax Rate

Income up to ₹ 3,00,000

No tax

Income from ₹ 3,00,000 – ₹ 5,00,000

5%

Income from ₹ 5,00,000– 10,00,000

20%

Income more than ₹ 10,00,000

30%

Surcharge: 10% of income tax, where total income exceeds ₹ 50 lakh up to ₹ 1 crore.

Surcharge: 15% of income tax, where the total income exceeds ₹ 1 crore.

Health & Education Cess: 4% of Income Tax.

  1. Income Tax Slab for Senior Citizens (80 Years Old or More)

Income Tax Slab

Tax Rate

Income up to ₹ 5,00,000

No tax

Income from ₹ 5,00,000– 10,00,000

20%

Income more than ₹ 10,00,000

30%

Surcharge: 10% of income tax, where total income exceeds ₹ 50 lakh up to ₹ 1 crore.

Surcharge: 15% of income tax, where the total income exceeds ₹ 1 crore.

Health & Education Cess: 4% of Income Tax.

For further clarification and professional assistance, feel free to contact at sandeeprawatca@gmail.com

(Mr. Sandeep Rawat has vast experience & knowledge in dealing with Direct and Indirect Taxation. He is providing his expertise service as Managing Partner at SRT Consultancy & Service. He can be reachedatsandeeprawatca@gmail.com)                                                                                                               

 

By: Sandeep Rawat - September 13, 2018

 

 

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