1. In order to provide more funds at the disposal of the taxpayers for dealing with the economic situation arising out of COVID-19 pandemic, the rates of Tax Deduction at Source (TDS) for the following non-salaried specified payments made to residents has been reduced by 25% for the period from 14th May, 2020 to 31st March, 2021:-
| S. No | Section of the Income-tax Act | Nature of Payment | Existing Rate of TDS | Reduced rate from 14/05/2020 to 31/03/2021 |
| 1 | 193 | Interest on Securities | 10% | 7.50% |
| 2 | 194 | Dividend | 10% | 7.50% |
| 3 | 194A | Interest other than interest on securities | 10% | 7.50% |
| 4 | 194C | Payment of Contractors and sub-contractors | 1% (individual/HUF) | 0.75% (individual/HUF) |
| 2% (others) | 1.5% (others) | |||
| 5 | 194D | Insurance Commission | 5% | 3.75% |
| 6 | 194DA | Payment in respect of life insurance policy | 5% | 3.75% |
| 7 | 194EE | Payments in respect of deposits under National Savings Scheme | 10% | 7.50% |
| 8 | 194F | Payments on account of re-purchase of Units by Mutual Funds or UTI | 20% | 15% |
| 9 | 194G | Commission, prize etc., on sale of lottery tickets | 5% | 3.75% |
| 10 | 194H | Commission or brokerage | 5% | 3.75% |
| 11 | 194-I(a) | Rent for plant and machinery | 2% | 1.50% |
| 12 | 194-I(b) | Rent for immovable property | 10% | 7.50% |
| 13 | 194-IA | Payment for acquisition of immovable property | 1% | 0.75% |
| 14 | 194-IB | Payment of rent by individual or HUF | 5% | 3.75% |
| 15 | 194-IC | Payment for Joint Development Agreements | 10% | 7.50% |
| 16 | 194J | Fee for Professional or Technical Services (FTS), Royalty, etc. | 2% (FTS, certain royalties, call centre) | 1.5% (FTS, certain royalties, call centre) |
| 10% (others) | 7.5% (others) | |||
| 17 | 194K | Payment of dividend by Mutual Funds | 10% | 7.50% |
| 18 | 194LA | Payment of Compensation on acquisition of immovable property | 10% | 7.50% |
| 19 | 194LBA(1) | Payment of income by Business trust | 10% | 7.50% |
| 20 | 194LBB(i) | Payment of income by Investment fund | 10% | 7.50% |
| 21 | 194LBC(1) | Income by securitisation trust | 25% (Individual/HUF) | 18.75% (Individual/HUF) |
| 30% (Others) | 22.5% (Others) | |||
| 22 | 194M | Payment to commission, brokerage etc. by Individual and HUF | 5% | 3.75% |
| 23 | 194-O | TDS on e-commerce participants | 1% | 0.75% |
| (w.e.f. 1.10.2020) |
2. Further, the rate of Tax Collection at Source (TCS) for the following specified receipts has also been reduced by 25% for the period from 14th May, 2020 to 31st March, 2021:-
| S. No | Section of the Income-tax Act | Nature of Receipts | Existing Rate of TCS | Reduced rate from 14/05/2020 to 31/03/2021 |
| 1 | 206C(1) | Sale of | ||
| (a) Tendu Leaves | 5% | 3.75% | ||
| (b)Timber obtained under a forest lease | 2.50% | 1.88% | ||
| (c) timber obtained by any other mode | 2.50% | 1.88% | ||
| (d) Any other forest produce not being timber/tendu leaves | 2.50% | 1.88% | ||
| (e) scrap | 1% | 0.75% | ||
| (f) Minerals, being coal or lignite or iron ore | 1% | 0.75% | ||
| 2 | 206C(1C) | Grant of license, lease, etc. of | 2% | 1.50% |
| (a) Parking lot | ||||
| (b) Toll Plaza | 2% | 1.50% | ||
| (c) Mining and quarrying | 2% | 1.50% | ||
| 3 | 206C(1F) | Sale of motor vehicle above 10 lakhs | 1% | 0.75% |
| 4 | 206C(1H) | Sale of any other goods | 0.10% | 0.075% |
| (w.e.f 01.10.2020) |
3. Therefore, TDS on the amount paid or credited during the period from 14th May, 2020 to 31st March, 2021 shall be deducted at the reduced rates specified in the table in para 1 above. Similarly, the tax on the amount received or debited during the period from 14th May, 2020 to 31st March, 2021 shall be collected at the reduced rates specified in the table in para 2 above.
4. It is further stated that there shall be no reduction in rates of TDS or TCS, where the tax is required to be deducted or collected at higher rate due to non-furnishing of PAN/Aadhaar. For example, if the tax is required to be deducted at 20% under section 206AA of the Income-tax Act due to non-furnishing of PAN/Aadhaar, it shall be deducted at the rate of 20% and not at the rate of 15%.
5. Legislative amendments in this regard shall be proposed in due course.
*************
Latest from Income Tax India:
Latest Posts:
- Operational Update – Middle East Airspace Situation
- Prime Minister speaks with the King of Jordan
- NCVET grants recognition to Orion Educational Society as Awarding Body (Standard)
- NCVET Recognizes Karnataka State Open University (KSOU) as Dual Awarding Body
- NCVET & Krishna Kanta Handiqui State Open University Sign Agreement for Recognition as Awarding Body (AB–Dual)
- NCVET & Sant Shiromani Ravidas Global Skills Park (SSR GSP) have signed agreement for NCVET Recognition as Awarding Body (AB – Dual)
- NCVET Grants Recognition to LabourNet Foundation as Awarding Body (Standard)
- Seva Sankalp Resolution – Department of Drinking Water and Sanitation
- Union Minister Dr. Mansukh Mandaviya Inaugurates New Office of Ministry of Youth Affairs & Sports at GPOA, Netaji Nagar, New Delhi
- Vice-President Releases 16 Publications Celebrating Tamil Scholars, Heritage and Culture
