In order to increase liquidity in the market and allow more cash in the hands of public, Finance Minister has announced reduced TDS/TCS rates for F.Y. 2020-21 effective 14th May 2020 up to 31st March 2021 .
There is no change in the monetary limits for the purpose of calculating TDS. Rates/sections not mentioned in the below table shall be considered as unchanged.
Further, TDS rate for payments where PAN is not submitted by the payee shall remain 20% without any relaxation.
Reduced TDS Rates F.Y. 2020-21
|
Particulars |
TDS Rates upto 13/05/2020 |
Reduced Rate w.e.f. 14/05/2020 |
|
Payments made to person resident in India- |
|
|
|
Section 192: Payment of salary |
Normal Slab Rate |
Normal Slab Rate |
|
Section 193: Interest on securities |
10% |
7.5% |
|
Section 194: Income by way of dividend |
10% |
7.5% |
|
Section 194A: Income by way of interest other than “Interest on securities” |
10% |
7.5% |
|
Section 194C: Payment to contractor/sub-contractor |
||
|
a) HUF/Individuals |
1% |
0.75% |
|
b) Others |
2% |
1.5% |
|
Section 194D: Insurance commission |
5% |
3.75% |
|
Section 194DA: Payment in respect of life insurance policy w.e.f. 1/9/2019, the tax shall be deducted on the amount of income comprised in insurance pay-out |
5% |
3.75% |
|
Section 194EE: Payment in respect of deposit under National Savings scheme |
10% |
7.5% |
|
Section 194F: Payment on account of repurchase of unit by Mutual Fund or Unit Trust of India |
20% |
15% |
|
Section 194G: Commission, etc., on sale of lottery tickets |
5% |
3.75% |
|
Section 194H: Commission or brokerage |
5% |
3.75% |
|
Section 194-I: Rent |
||
|
a) Plant & Machinery |
2% |
1.5% |
|
b) Land or building or furniture or fitting |
10% |
7.5% |
|
Section 194-IA: Payment on transfer of certain immovable property other than agricultural land |
1% |
0.75% |
|
Section 194-IB: Payment of rent by individual or HUF not liable to tax audit |
5% | 3.75% |
|
Section 194-IC: Payment of monetary consideration under Joint Development Agreements |
10% | 7.5% |
|
Section 194J: Fees for professional or technical services: |
|
|
|
i) sum paid or payable towards fees for fully technical services |
2% |
1.5% |
|
ii) sum paid or payable towards royalty in the nature of consideration for sale, distribution or exhibition of cinematographic films; |
2% |
1.5% |
|
iii) Any other sum |
10% |
7.5% |
|
Section 194K: Income in respect of units payable to resident person |
10% | 7.5% |
|
Section 194LA: Payment of compensation on acquisition of certain immovable property |
10% | 7.5% |
|
Section 194LBA(1): Business trust shall deduct tax while distributing, any interest received or receivable by it from a SPV or any income received from renting or leasing or letting out any real estate asset owned directly by it, to its unit holders. |
10% | 7.5% |
| Section 194LBB: Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)] | 10% | 7.5% |
| Section 194LBC: Income in respect of investment made in a securitisation trust (specified in Explanation of section115TCA) | 25% in case of Individual or HUF 30% in case of other person |
18.75% in case of Individual or HUF 22.5% in case of other person |
|
Section 194M: Payment of commission (not being insurance commission), brokerage, contractual fee, professional fee to a resident person by an Individual or a HUF who are not liable to deduct TDS under section 194C, 194H, or 194J. Tax shall be deducted under section 194M with effect from 1/09/2019 when aggregate of sum credited or paid during a financial year exceeds Rs. 50 lakh. |
5% |
3.75% |
| Section 194-O: Payment or credit of amount by the e-commerce operator to e-commerce participant |
1% |
0.75% |
Reduced TCS Rates FY 2020-21
|
Particulars |
TCS Rates upto 13/05/2020 |
Reduced Rate w.e.f. 14/05/2020 |
|
Section 206C(1) Sale of |
|
|
|
Tendu Leaves |
5% |
3.75% |
|
Timber obtained under forest lease |
2.5% |
1.875% |
|
Timber obtained by any other mode |
2.5% |
1.875% |
|
Any other forest produce |
2.5% |
1.875% |
|
Scrap |
1% |
0.75% |
|
Minerals being coal or ignite or iron ore |
1% |
0.75% |
|
Section 206C(1C) Grant of license, lease etc. of Parking lot, Toll Plaza, Mining and quarrying |
2% |
1.5% |
|
Section 206C(1F) Sale of motor vehicle above Rs. 10 lakhs |
1% |
0.75% |
|
Section 206C(1H) Sale of any other goods (Specific Conditions apply) |
0.1% |
0.75% |
This step of reduced TDS rates shall definitely help the common man retain some additional cash for business/personal consumption.
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