TDS RATE CHART FY 19-20 AY 20-21

1. TDS RATE CHART FY 2019-20 Ay 2019-20 Notes to TDS RATE CHART FY 2019-20 AY 2020-21:  No TDS on GST: As...

1. TDS RATE CHART FY 2019-20 Ay 2019-20

Notes to TDS RATE CHART FY 2019-20 AY 2020-21: 

1. No TDS on GST: As per Circular 23/2017 ,TDS is not applicable on GST part if GST is shown separately. As per circular 01/2014 dated 13.01.2014 TDS is not applicable on service tax part if service tax is shown separately. 
2. TDS at higher rate i.e., 20% has to be deducted if the deductee does not provide PAN to the deductor.(read detail u/s 206AA) 
3. TDS on Good Transport wef 01.06.2015: TDS shall be applicable on payment to transporter wef 01.06.2015 .However tds exemption will be available only to those transporters who own ten or less goods carriages at any time during the previous year. Such a transporter would also need to furnish a declaration to that effect to the payer along with the PAN. 
4. Surcharge on TDS on salary is applicable if taxable salary is more than 50 lakh @ 10% and if salary is more than one crore @ 15 % 
5. Surcharge on tax other than salary is not on payment made to resident. 
6. Surcharge on TDS applicable on payment made to non-resident (See chart below) details ) 
7. TDS is deductible on full amount if threshold limit is crossed during the year including the amount paid earlier during the year along with interest, if applicable. 
8. No Cess on payment made to resident: Health and education cess @ 4% is not applicable in case of resident Individual /HUF/ Firm/ AOP/ BOI/ Domestic Company in respect of payment of income other than salary. Health and education cess @ 4% instead of education cess 3 % earlier is deductible at source in case of non-residents and foreign company. 
9. Section 206AA in the Act makes furnishing of PAN by the employee compulsory in case of receipt of any sum or income or amount, on which tax is deductible. If employee (deductee) fails to furnish his/her PAN to the deductor , the deductor has been made responsible to make TDS at higher of the following rates: 
10. i) at the rate specified in the relevant provision of this Act; or 
11. ii) at the rate or rates in force; or 
12. iii) at the rate of twenty per cent. The deductor has to determine the tax amount in all the three conditions and apply the higher rate of TDS. 
13. However, where the income of the employee computed for TDS u/s 192 is below taxable limit, no tax will be deducted. Health and education cess @ 4% is not to be deducted, in case the tax is deducted at 20% u/s 206AA of the Act. 
14. In Case of TCS without pan rate shall be 5 % or double of the prescribed rate ,whichever is higher. 
15. TDS by Individual and HUF (Non Audit) case not deductible :An Individual or a Hindu Undivided Family whose total sales, gross receipts or turnover from business or profession carried on by him does not exceeds the monetary limits (Rs.100,00,000 in case of business & Rs.50,00,000 in case of profession) under Clause (a) or (b) of Sec.44AB during the immediately preceding financial year shall not be liable to deduct tax u/s.194A,194C, 194H, 194I & 194J.So no tax is deductible by HUF/Individual in first year of operations of business even sales/receipt is more than 100/50 Lakh. 

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Changes in TDS rates in Finance Act-2019 

In Finance Budget-2019 two major changes has been made regarding TDS deduction ,first is regarding Increase in cut off limit of Interest from Bank and Post office deposits under section 194A has been increased to Rs 40000/- from Rs 10000 earlier. Second change is regarding increase in cut off limit under section 194-I Tds on Rent ,which has been increased to Rs 240000/- from Rs 180000/- earlier. 

1. In section 194A of the Income-tax Act, in sub-section (3), in clause (i), for the words “ten thousand” wherever they occur, the words “forty thousand” shall be substituted. 

2. In section 194-I of the Income-tax Act, in the first proviso, for the words “one hundred and eighty thousand rupees”, the words “two hundred and forty thousand rupees” shall be substituted

Surcharge /Cess applicable on TDS/TCS 
1.Surcharge on payment made to resident other than salary is not deductible

2.In case of nonresident shall be increased by a surcharge in the case of—

(i) every non-resident being an individual or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act,—

(a) at the rate of ten per cent. of such tax, where the income or the aggregate of income paid or likely to be paid and subject to deduction exceeds fifty lakh rupees but does not exceed one crore rupees;

(b) at the rate of fifteen per cent. of such tax, where the income or the aggregate of income paid or likely to be paid and subject to deduction exceeds one crore

rupees;

(ii) every non-resident being a co-operative society or firm or local authority at the rate of twelve per cent. Where the income or the aggregate of income paid or likely to be paid and subject to deduction exceeds one crore rupees;

(iii) every company other than a domestic company at the rate of two per cent. where the income or the aggregate of income paid or likely to be paid and subject to deduction exceeds one crore rupees but does not exceed ten crore rupees;

(iv)every company other than a domestic company at the rate of five per cent. where the income or the aggregate of income paid or likely to be paid and subject to deduction exceeds ten crore rupees.

7. Due date to Deposit TDS and TCS & Mode FY 2019-20

To Know the full concept of Due date to deposit TDS ,we must have to read it in two Parts  

1. When Tax is to be deducted/collected?
2. When tax deducted at source (TDS/TCS) is to be deposited (TDS due date of deposit)?

When tax is to be deducted?

1. At the time of credit or payment, whichever is earlier
• 193- Interest on securities
• 194A- Interest Other than “Interest on securities”
• 194C- Payment to contractors / sub contractors
• 194D – Insurance commission
• 194H – Commission or Brokerage
• 194G- Commission on sale of lottery tickets
• 194I- Rent
• 194J- Professional or technical fees
2. Before making payment or distribution
• 194- Dividend
3. At the time of payment
• 192- Salaries
• 194B- Winning from lotteries / crossword puzzles
• 194BB Winnings from horse races
• 194EE – Payment from National Saving Scheme
• 194F Payment for repurchase of units by UTI / mutual funds
• 194 -IA : payment of transfer of immovable property >50 Lakh
• 194LA: Payment of compensation on acquisition of certain immovable property

When Tax is to be collected 

1. At the time of Debit of Account or Receipt ,whichever is earlier
• Scrap 
• Tendu Leaves 
• Timber obtained under a forest lease or other mode 
• Any other forest produce not being a timber or tendu leave 
• Alcoholic Liquor for human consumption 
• Parking Lot, toll plaza, mining and quarrying Minerals, being coal or lignite or iron ore (applicable from July 1,2012) 
2. At the time of receipt/collection  
• Sale of motor vehicle > 10 lakh

When date of deduction/Collection is decided then according to point of deduction/collection then due date to deposit is to be decided as under.

Challan to deposit TDS and TCS & mode of deposit

1. For all sections under TDS and TCS one challan is to be deposited ie ITNS-281 and to deposit TDS/TCS -TAN(tax deduction & collection account number is to be obtained and used.
2. Deductor can adjust excess tds deposited in one section /assessment year with another section /assessment year so no need to deposit section wise challan.
3. However for TDS collected under section 194IA (TDS on immovable property over 50 Lakh) tax is to be deposited on challan cum return 26QB.Further to deposit this challan TAN number is not required though deductor will FILL his PAN 
4. TAX must be deposited through online mode only or through designated bank branches.

Refund of Excess TDS deposited:

As pointed out above in point number 2, you may adjust excess TDS in other section /assessment year/quarter. However if you want refund then you may apply on form 26B online for excess TDS.

“Time and mode of payment to Government account of tax deducted at source or tax paid under sub­ section (1A) of section 192. Rule: 30.

(1) All sums deducted in accordance with the provisions of Chapter XVII‐B by an office of the Government shall be paid to the credit of the Central Government ‐

• (a) on the same day where the tax is paid without production of an income‐tax challan; and
• (b) on or before seven days from the end of the month in which the deduction is made or income‐tax is due under sub‐section (1A) of section 192, where tax is paid accompanied by an income‐tax challan.

(a) on or before 30th day of April where the income or amount is credited or paid in the month of March; and(2) All sums deducted in accordance with the provisions of Chapter XVII‐B by deductors other than an office of the Government shall be paid to the credit of the Central Government

• (b) in any other case, on or before seven days from the end of the month in which‐ the deduction is made; or income‐tax is due under sub‐section (1A) of section 192.

(2A) Notwithstanding anything contained in sub‐rule (2) ,any sum deducted under section 194-IA shall be paid to the credit of the Central Government within a period of seven days 30 days (wef 01.06.2016) from the end of the month in which the deduction is made and shall be accompanied by a challan-cum-statement in Form No. 26QB

 (3) Notwithstanding anything contained in sub‐rule (2), in special cases, the Assessing Officer may, with the prior approval of the Joint Commissioner, permit quarterly payment of the tax deducted under section 192 or section 194A or section 194D or section 194H for the quarters of the financial year specified to in column (2) of the Table below by the date referred to in column (3) of the said Table:‐

8.Person required to file E TDS Return & Duties of Deductor

For quick and efficient collection of taxes, the Income-tax Act has incorporated a system of deduction of tax at the point of generation of income. This system is called “Tax Deducted at Source” commonly known as TDS. Under this system, tax is deducted at the point of origination of income. Tax is deducted by the payer and the same is directly remitted to the Government by the payer on behalf of the payee.

The provisions of tax deducted at source presently apply to several payments like salary, interest, commission, brokerage, professional fees, royalty, etc.​

Meaning of TAN

Tax Deduction Account Number is a 10-digit alphanumeric number issued by the Income-tax Department (herein after referred to as ‘TAN’). TAN is required to be obtained by all persons who are responsible to deduct tax at source (‘TDS’) except in case of a person who is responsible to deduct tax at source under Section 194-IA.

Given below is an illustrative TAN:

DELM12345L

First 3 alphabets of TAN represent the jurisdiction code, 4th alphabet is the initial of the name of the TAN holder. The next 5 digits of the TAN are system generated numbers between 00001 to 99999 and last character, i.e., the tenth character is an alphabetic check digit.

Persons liable to apply for TAN

Every person who is liable to deduct tax at source is required to obtain TAN. However, a person who is required to deduct tax under Section 194-IA​ and 194IB can use PAN in place of TAN as he is not required to obtain TAN.

Relevance of TAN

It is mandatory to quote TAN in following documents:

(a) TDS statements i.e. return

(b) Challans for payment of TDS

(c) TDS certificates

(d) Other documents as may be prescribed

Penalty

If a person fails to apply for TAN or failed to quote or quotes incorrect TAN in the above specified documents, a penalty of Rs. 10,000 shall be levied.

Procedure to obtain TAN

An application for allotment of TAN shall be made in duplicate in Form No. 49B at any TIN Facilitation Centers (TIN-FC). Addresses of TIN-FCs are available at NSDL-TIN website. Alternatively, one can apply for TAN online at the NSDL-TIN website.

Charges for obtaining a TAN

A fee of Rs. 55 + service tax (as applicable) should be paid as processing fee while submitting application for TAN.

​​​Person liable to furnish TDS statement

Every person responsible for deduction of tax shall furnish quarterly statements in respect thereof.

DUTIES OF TAX DEDUCTOR/COLLECTOR

1. To apply for Tax Deduction Account Number (TAN) in form 49B, in duplicate at the designated TIN facilitation centers of NSDL(please see www.incometaxindia.gov.in), within one month from the end of the month in which tax was deducted. However for tax deduction u/s 194IA (tds on transfer of immovable property) the deductor may use PAN instead of TAN
2. If a deductor has many offices then deductor may take one TAN for all branches or take separate TAN for each TAN. If separate TAN is taken then deductor can check TDS compliance report of all TAN at TDSCPC website 
3. To quote TAN (10 digit reformatted TAN) in all TDS/TCS challans, certificates, statements and other correspondence.
4. To deduct/collect tax at the prescribed rates at the time of every credit or payment, whichever is earlier, in respect of all liable transactions.
5. To remit the tax deducted/collected within the prescribed due dates by using challan no. ITNS 281 by quoting the TAN and relevant section of the Income-tax Act.
6. To issue TDS/TCS certificate, complete in all respects, within the prescribed time in Form No.16(TDS on salaries), 16A(other TDS) 27D( TCS).
7. To file TDS/TCS quarterly statements within the due date and revise the same ,wherever necessary.
8. To mention PAN of all deductees in the TDS/TCS quarterly statements.

TRACES online portal for deductors and deductees :

TRACES is a web-based application of the Income Tax Department that provides an interface to all stakeholders associated with TDS administration. It enables viewing of challan status, downloading of Consolidated File, Justification Report and Form 16 / 16A as well as viewing of annual tax credit statements (Form 26AS). The deductor has to register at TRACES website to avail facility available at the website 

Facility available at Traces for deductors 

1. Download Consolidated  File / 
2.  Download Form 16 / 16A / 16B / 27D.
3. Online correction of TDS returns 
4. Refund of Excess TDS

5.      Justification report: After filing of the return, Department shall process the return and issue intimation of return processed without default or with defaults. The defaults are mainly on account of deduction of tax at less rate , late filing of return ,interest due to late deposit of Tax ,mismatching overbooking of challan , incorrect pan details etc. In intimation only summary of default is sent to check the details deductor is supposed to download Justification report from TDSCPC website. 

9.  Due date TDS-TCS return 24Q, 26Q ,27Q,27EQ and Form 16 , Form 16A for Financial year 2018-19 for Govt as well as non Govt deductor

Quarterly return Form  

Deductor is required to file TDS/TCS return quarterly, however nil return is not mandatory. These returns may be filed at any TIN-FC by paying a small fee. However you may upload original return directly at e filing site free.

1. 24Q   : For TDS deducted from Salary Income 
2. 26Q   : For  TDS deducted from all other section except salary & 194IA from resident
3. 27Q   :  For TDS deducted from Non-resident except salary
4. 27EQ : For Tax collected at source
5. 26QB : For section 194IA separate return is not required ,challan cum return is to be filled on form 26QB (Tax to be deposited within 30 days(wef 01.06.2016)(earlier it was 7 days) from the end of the month in which tax is to be deducted )

Update : Form 16 PART B also mandatory to be downloaded from TRACES portal

 Nil TDS return is not mandatory 

As per income tax rules/act Nil tds return is not mandatory, however to facilitate the deductors and to update data Govt has provided a facility on Traces website for declaring NIL tds return.

Correction statement of  E TDS return 

You may file correction return any number of times, No time limit has been defined yet.  This return can be filed with TIN-FC .To file the revised TDS return you have to download consolidated FVU file from TDSCPS website The correction return filing facility has not been provided at Income tax India e filing site but we expect that soon it will be made available. However you may correct challan details/tag replace challan/allocation of interest and fees online/move deductee rows from unmatched challan without digital signature at www.tdscpc.gov.in and pan details with digital signature. If short payment of TDS is not settled by Deductor then he cannot download form 16A/16 of that quarter/year.

TDS Certificate 

1. Form 16 : For tds deducted from salary
2. Form 16A : For other Tax deductions except salary & 194IA
3. Form 16B : TDS from section 194IA (to be issued within  45 days wef 01.06.2016)(earlier it was 22 days) from the end of the month in which tax is to be deducted )
4. All above form must be downloaded from TDSCPC (TRACES) website .However in case of Form 16 only PART-A is to be downloaded from TRACES website. Earlier this was mandatory for only companies ,Banks and co-operative societies engaged   in Banking services with effect from 01.04.2011 through circular number 3/2011.
5. Update : Form 16 PART B also mandatory to be downloaded from TRACES portal
6. Form 16A downloaded from TDSCPC can be signed manually or can be authenticated through digital signature only.

Read more from links given below

1. Procedure How  to register at TRACES (www.tdscpc.gov.in) and 
2. How to download Form 16A form TRACES (www.tdscpc.gov.in)
3. HOW TO DOWNLOAD FORM 16 FROM TDSCPC WEBSITE
4. How to download Form 16B from TDSCPC website 

 10. Interest on Late deposit of TDS/TCS & Penalty & Prosecution & other consequences on Non deposit of TDS/TCS 

As per income-tax act/rules, interest on late deposit of TDS is payable under the following two circumstances

1. Tax is not deducted , when it was deductible
2. Tax once deducted, is not paid on or before due date

A deductor would face the following consequences if he fails to deduct TDS or after deducting the same fails to deposit it to the credit of Central Government’s account:Consequences if default is made in payment of TDS

·         a) Disallowance of expenditure: As per section 40(a)(i) of the Income-tax Act, any sum (other than salary) payable outside India or to a non-resident, which is chargeable to tax in India in the hands of the recipient, shall not be allowed to be deducted if it is paid without deduction of tax at source or if tax is deducted but is not deposited with the Central Government till the due date of filing of return.

However, if tax is deducted or deposited in the subsequent year, as the case may be, the expenditure shall be allowed as deduction in that year.

Similarly, as per section 40(a)(ia), any sum payable to a resident, which is subject to deduction of tax at source, would attract 30% disallowance if it is paid without deduction of tax at source or if tax is deducted but is not deposited with the Central Government till the due date of filing of return.

However, where in respect of any such sum, tax is deducted or deposited in subsequent year, as the case may be, the expenditure so disallowed shall be allowed as deduction in that year.

The same rule is also applicable on Income from other sources.

·         b) Levy of interest: As per section 201 of the Income-tax Act, if a deductor fails to deduct tax at source or after the deducting the same fails to deposit it to the account of Central Government then he shall be deemed to be an assessee-in-default and liable to pay simple interest as follows:

(i) at one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and

(ii) at one and one-half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid.

·         c) Levy of Penalty: Penalty of an amount equal to tax not deducted could be imposed under section 271C. Penalty shall be charged under section 221 if deductor fails to deduct and pay tax to the credit of Central Governm​ent. The penalty shall be levied to the extent the Assessing Officer directs, however, the total amount of penalty shall not exceed the amount of tax in arrears.

·         d) Prosecution: If a person fails to pay to the credit of the Central Government the tax deducted at source by him he shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years and with fine.

 11 : Late Fees -Penalty on Late filing of TDS return 

1. Failure to apply for TAN in time or Failure to quote allotted TAN or Wrong quoting of TAN :  Penalty of Rs.10,000 is leviable u/s.272BB

2. Late Filing of TDS-TCS statement:  Deductor will be liable to pay by way of fee of Rs 200 per day till the failure to file TDS statement continues. However, the total fee cannot exceed the amount of TDS deductible from which statement was required to be filed.(section 234E) .Further as per section 234E ,Late fees is required to be paid before the filing of TDS/TCS return. Read How to avoid Late fees u/s 234E (read more post related to section 234E)

3. Failure to File TDS return on Time and filling of incorrect statement: New Section for Penalty for non submission of ETDS /ETDS return (section 271H)(applicable from 01.07.2012)

Failure to deliver statement within time prescribed u/s 200 (3) or to the proviso to sub-section (3) of section 206C may liable to penalty which shall not be less than Rs. 10,000/- but which may extend to Rs. 1,00,000/-. No penalty if payment of tax deducted or collected along with fee or interest and delivering the statement aforesaid before the expiry of 1 year from the time prescribed for delivering the such statement. However No penalty shall be imposed u/s 271H if the person proves that there was reasonable cause for the failure.(section 273B)

4. Penalty on Late issue of TDS certificate form 16/Form 16A/form 27D/Form 16B :

If TDS certificate is not issued within due date as prescribed then penalty @ 200 per day may be imposed till the default continues for each default. However, the maximum penalty cannot exceed the amount of TDS deducted for which TDS certificate was required to be issued.

5. Assessee In default (amendment in section 201)

The Deductor will not to be treated as assessee in Default provided the resident payee has furnished his return u/s 139 and has taken into account such amount for computing income in such Return of Income and has paid the Tax Due on the income declared by him in such return of income and furnishes a certificate to this effect, duly certified by a CA, in the prescribed form. This form is yet to be notified.

However, the interest for non deduction of tax would be payable from the date on which such tax was collectible till the date of furnishing of return of income by the resident payee.

 12 .Various Passwords required to Use Traces Website

13. Other Point to be noted

1. One Challan Can be deposited for all Sections?
2. How to File Nil TDS return Online
3. How to download Consolidated FVU
4. TDS on Job work(194C) Tds on Job work has been relaxed read new definition u/s 194C.
5. TDS on Cold Storage (194C clarification)
6. No TDS on service tax on all section (circular -01/2014 dated 13.01.2014)
7. TDS on Rent (various circulars by department on tds on rent )
8. E-payment of TDS mandatory from 01.04.2008
9. E-Payment From Other Banks Account Allowed
10. TDS challan ITNS 281 In excel & 
11. How To pay Income Tax/Tds Online FAQ
12. Nil TDS on Transporter and others to be reported in ETDS quarterly returns
13. 1% TDS on transfer of property u/s 194IA wef 01.06.2013
14. TDS on rent section 194-1 brief notes, circular, notification and case laws
15. 42 Important points related to TDS/TCS deduction and etds return filing

[Download TDS RATE CHART FY 19-20 AY 20-21] VERSION 1=27/04/2019