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Reduced TDS & TCS Rate from 14-05-2020 to 31-03-2021

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:-

That is, if the citizen were paying the tax at the given rate so now, they have to pay the tax rate with revised condition with the deduction of 25% (Now they have to pay 25% less tax as compared to previous financial years). This has done to maintain the liquidity of money as citizens are going through economic crisis due to COVID-19.

TDS Rate Chart for FY 2020-21 Pre & Post 14th May 2020

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% 7.5%
2 194 Dividend 10% 7.5%
3 194A Interest other than interest on securities 10% 7.5%
4 194C Payment of Contractors and sub-contractors 1% (individual/HUF)
2% (others)
0.75% (individual/HUF)
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% 7.5%
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% 1.5%
12 194-I(b) Rent for immovable property 10% 7.5%
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% 7.5%
16 194J Fee for Professional or Technical Services (FTS), Royalty, etc. 2% (FTS, certain royalties, call centre)
10% (others)
1.5% (FTS, certain royalties, call centre)
7.5% (others)
17 194K Payment of dividend by Mutual Funds 10% 7.5%
18 194LA Payment of Compensation on acquisition of immovable property 10% 7.5%
19 194LBA(1) Payment of income by Business trust 10% 7.5%
20 194LBB(i) Payment of income by Investment fund 10% 7.5%
21 194LBC(1) Income by securitisation trust 25% (Individual/HUF)
30% (Others)
18.75% (Individual/HUF)
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%
(w.e.f. 1.10.2020)
0.75%

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:-

TCS Rate Chart for FY 2020-21 Pre& Post 14th May 2020

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

2.5%

1.875%
    (c) Timber obtained by any other  mode
2.5%

1.875%
    (d) Any other forest produce not being timber/tendu leaves
2.5%

1.875%
    (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
(a) Parking lot
2% 1.5%
   
 (b) Toll Plaza

2%

1.5%
   
(c) Mining and quarrying

2%

1.5%
3 206C(1F) Sale of motor vehicle above 10 lakhs 1% 0.75%
4 206C(1H) Sale of any other goods 0.1%
(w.e.f 01.10.2020)
0.075%

Tax Charges Due to Non-Furnishing of ADHAR/PAN

It is additionally expressed that there will be no decrease in paces of TDS or TCS, where the expense is required to be deducted or gathered at higher rate due to non-outfitting of PAN/Aadhaar. For instance,if the expense is required to be deducted at 20% under area 206AA of the Income-charge Act due to non-outfitting of PAN/Aadhaar, it will be deducted at the pace of 20% and not at the pace of 15%.

[1] https://pib.gov.in/PressReleasePage.aspx?PRID=1623745


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