TDS Rate on Payment of Salary and Wages
Section 192 | Payment of Salary and Wages |
Criterion of Deduction | TDS is deducted if the estimated income of the employee is taxable. Employer must not deduct tax on non-taxable allowances like conveyance allowance, rent allowance, medical allowance and deductible investments under sections like 80C, 80CC, 80D, 80DD, 80DDB, 80E, 80GG and 80U. No tax is required to be deducted at source if the estimated total income of the employee is less than the minimum taxable income (Rs. 2,20,000/- in case of Individual, HUF, AOP, BOD and AJP. Nil for others.) |
TDS Rate | As per Income Tax, Surcharge and Education Cess rates applicable on the estimated income of employee for the year |
TDS Rates on Payments other than Salary and Wages to Residents (including domestic companies)
Section | For Payment of | On Payments Exceeding | Individual/HUF | Others |
193 | Interest on Debentures | Rs. 5000/- | 10% | 10% |
194 | Deemed Dividend | No minimum | 10% | 10% |
194 A | Interest other than on securities by banks | Rs. 10000/- | 10% | 10% |
194 A | Interest other than on securities by others | Rs. 5000/- | 10% | 10% |
194 B | Winnings from Lotteries / Puzzle / Game | Rs. 10000/- | 30% | 30% |
194 BB | Winnings from Horse Race | Rs. 5000/- | 30% | 30% |
194 C (1) | Payment to Contractors | Rs. 30000/- for single payment Rs. 75000/- for aggregate payment during Financial Year | 1% | 2% |
194 C (2) | Payment to Sub-Contractors / for Advertisements | |||
194 D | Payment of Insurance Commission | Rs. 20000/- | 10% | 10% |
194 EE | Payment of NSS Deposits | Rs. 2500/- | 20% | NA |
194 F | Repurchase of units by Mutual Funds / UTI | Rs. 1000/- | 20% | 20% |
194 G | Commission ons Sale of Lottery tickets | Rs. 1000/- | 10% | 10% |
194 H | Commission or Brokerage | Rs. 5000/- | 10% | 10% |
194 I | Rent of Land, Building or Furniture | Rs. 180000/- | 10% | 10% |
Rent of Plant & Machinery | Rs. 180000/- | 2% | 2% | |
194 IA | Transfer of Immovable Property (w.e.f. 01.06.2013) | Rs. 50 lacs | 1% | 1% |
194 J | Professional / technical services, royalty | Rs. 30000/- | 10% | 10% |
194 J (1) | Remuneration / commission to director of the company | – | 10% | 10% |
194 J (ba) | Any remuneration / fees / commission paid to a director of a company, other than those on which tax is deductible u/s 192. | – | 10% | 10% |
194 L | Compensation on acquisition of Capital Asset | Rs. 100000/- | 10% | 10% |
194 LA | Compensation on acquisition of certain immovable property | Rs. 200000/- | 10% | 10% |
Notes:
- No surcharge or education cess is deductible / collectible at source on payments made to residents {Individuals / HUF / Society / AOP / Firm / Domestic Company) on payment of incomes other than salary or wages.
- TDS at higher rate of 20% has to be deducted if the deductee does not provide PAN to the deductor.(section 206AA)
All persons who are required to deduct tax at source or collect tax at source on behalf of Income Tax Department are required to apply for and obtain Tax Deduction or Tax Collection Account Number (TAN).
Issue of TDS Certificate
1. Section 192 (TDS on Salary) :
The certificate on Form No. 16 should be issued by the deductor by 31st day of May of the financial year immediately following the financial year in which the income was paid and tax deducted.
2. In all other cases :
The certificate on Form No. 16A should be issued within fifteen days from the due date for furnishing the “statement of TDS” under rule 31A.
Forms for submitting Quarterly Statements of Tax Deducted at Source (Rule 31A)
(a) Statement of deduction of tax under section 192 in Form No. 24Q
(b) Statement of deduction of tax under sections 193 to 196D in :
- Form No. 27Q in respect of the deductee who is a non-resident not being a company or a foreign company or resident but not ordinarily resident; and
- Form No. 26Q in respect of all other deductees.
Due Dates for submitting Quarterly Statements of Tax Deducted at Source (Rule 31A)
Date of ending of the quarter of the financial year | Due date, if deductor is an office of the Government | Due Date for others |
30th June | 31st July of the financial year | 15th July of the financial year |
30th September | 31st October of the financial year | 15th October of the financial year |
31st December | 31st January of the financial year | 15th January of the financial year |
31st March | 15th May of the financial year immediately following the financial year in which deduction is made | 15th May of the financial year immediately following the financial year in which deduction is made. |