TDS Rate Chart

UPDATE: As a part of the special and comprehensive economic package due to COVID-19 pandemic - Aatmanirbhar Bharat Abhiyaan, the following measures have been taken with respect to TDS and TCS:

TDS rates for non-salaried payments made to residents and TCS rates for the specified receipts have been reduced by 25% of the existing rates.

The new rates will only be applicable to payments other than salary, such as payment for contract, professional fees, rent, interest, dividend, commission, brokerage, etc.

The reduced rates will be applicable for the remaining part of FY 2020-21, i.e., from 14th May, 2020 to 31st March, 2021.

This measure is expected to result in a liquidity release of Rs. 50,000 crore.

TDS is basically a spot tax, deducted from the actual source of income. The same is described in the indirect tax section of Income tax Act 1961. It is implied on the income received from financial products like interest received on fixed deposits, incentives from the employer, commission’s payments, dividends on bonds, sale/purchase or rent of any immovable property and money earned as lottery or awards. The TDS rate applicable under different sections & subsection of is between 1%- 30%.

*Threshold amount is the max. amount exempt from TDS. The above rates are indicative and may change based on government notification.

Other indirect taxes such as service tax, TDS are also collected prior release of a payment. The TDS rates and collection is regulated by CBTD (Central Board for Direct Taxes).

TDS is a spot tax, deducted from the actual source of income. The same is described in the indirect tax section of Income tax Act 1961. It is implied on receiving income from various financial products. TDS is charged on various incomes generated in the form of incentives, commissions, payment & dividends earned for a variety of sale, services, rent or purchase of a property, interest earned on term deposits, etc.

The rates at which TDS is applied may vary as per the nature of income which could be between 1% - 30%. The onus to collect TDS and deposit the same lies on the service provider or the seller.

TDS Deduction Exemptions

There are few cases when the TDS is exempted. TDS is not levied on payments in favor of RBI, or towards any other recompense to the central government. Apart from this, TDS is exempted from the payment of interest from the following:

Apart from the above, TDS might not be pertinent on various other avenues as well. For example interest earned on the compensation granted from Motor Vehicles Claims Tribunal.

The following are the TDS rates applicable to some common types of income and payments that are taxed using the tax deducted at source method:

TDS Deduction on Fixed Deposit Interest Earnings

a) The tax deduction at source in cases of interest earned on fixed deposit is calculated and applied beyond a threshold limit.
b) The current applicable limit is Rs. 10,000 in a financial year. This has been increased to Rs. 40,000 annually from FY 2019-20 onwards.
c) In case, an individual earns interest more than the threshold limit on fixed deposit on either single or consolidated interest for all fixed deposits held with the same PAN number, then TDS will be applicable at a rate of 10% from the interest payout or maturity proceeds whichever happens earlierLet’s understand with an example. Mr. X is holding a Fixed Deposit of Rs. 15 Lakh booked for 1 year term & rate of interest is 10% p.a. He would earn ₹ 150,000 as interest on maturity after 1 year. The bank in such as case will deduct TDS @ 10% of ₹ 150,000 i.e. ₹ 15,000 and deposits the TDS amount with Income Tax Department on the behalf of customer Mr. X. In return, Mr. X would receive a TDS certificate, which is generally referred as Form 16A in taxation terms.

For Fixed deposits, TDS is only applicable on the payee when he/she exceeds the interest earning of Rs. 10,000 in a financial year. Payee furnishing PAN are liable to pay 10% on the interest earned through fixed deposits, else they need to pay 20% if PAN is not possessed. For Senior Citizens (60 years or older) are exempted to a limit of Rs. 50,000, earlier it was Rs. 10,000.

TDS Rate on Sale of the Immovable Property

a) According to section 194-IA in the Income Tax provision, TDS is applied on the sale of any immovable property at 1%.
b) In case, the buyer is unable to furnish a pan card, the TDS rate may be levied at a higher rate of up to a maximum limit of 20%.
c) The transferee of the property is liable for deducting TDS prior paying the amount to the seller (transferor) while selling the property.
d) The immovable property includes any residential or commercial building, plots excluding the notified agricultural land, and any portion of a building.
e) The transaction can be made via cheque cash or draft by the transferee.

TDS Rate on Rent of an Immovable Property

a) Resident individual, other than an HUF member, paying rent for an immovable property to the resident landlord is accountable for withholding tax at source.
b) However, TDS would be applicable at the rate of 10% only in cases where the annual rent amount exceeds ₹ 1,80,000 in a single financial year.
c) The rent would include any payment in the form of lease rental, sublease or other valid agreement for using the building, furniture, land or fittings, etc.
d) The property-owner is also liable to provide a valid rent receipt on each and every payment, which duly mentions any TDS deducted.
e)At the end of financial year, the renter (lessee) should also provide Form 16 (TDS certificate) to the lessor (landlord) for all TDS amount deducted and paid to the tax authorities for the said financial year.
f) The transaction can be made via cheque cash or draft by the transferee.

TDS Rate on Purchase of the Immovable Property

a) For the purchase of any property involving the exchange of money between the owner and buyer, TDS @ 1% shall be applicable.
b) However, agricultural land is not considered under this provision of TDS.
c) The transferee should make the transaction via cash or cheque or draft or other agreed payment modes.

TDS Rate on Transfer of the Immovable Property

a) A transfer of residential property attracts TDS @ 1%. This is, however, not applicable in the case of agricultural lands.
b) The buyer or transferee deducts the applicable tax amount prior making payment to the transferor.
c) The transaction can be made via cheque cash or draft by the transferee.

TDS Rate on the Immovable Property (in the case of NRI)

a) Under section 195 of Income Tax Act, the provision for TDS for NRI on immovable property is explained. According to this section, any buyer who is making payment to a non-resident individual is liable for deducting TDS as per the rate applicable.
b) The Capital gains duly received post selling any immovable property by any NRI in India is subjected to income tax. The transaction can be made via cheque cash or draft by the transferee.

TDS Rate on Under-Construction Immovable Property

For any under construction properties where the net worth of the property is calculated as more than ₹ 50 lakhs, the TDS will be applicable on the installments paid on or after 1st of June, 2013. The transaction can be made via cheque cash or draft by the transferee.

TDS Rate on Withdrawal of EPF

TDS is applicable on the withdrawal of EPF in case an employee withdraws PF amount ₹ 50,000 & above with less than five years of continuous service at a rate mentioned below:

a) 10% in case Form-15G/15H are not submitted. However, PAN is submitted.
b) 34.608% or maximum marginal rate if the employee is unable to provide PAN number.

TDS Rates Charts

The TDS calculation rates as applicable to the fiscal year 2018 -19 are given below.

TDS Rates for Non-Resident Indians (NRIs)

Under section 192, employer is eligible to deduct TDS from the estimated income of the employee. No tax will be deducted if the employee hasn’t exceeded the minimum tax slab in the given financial year. TDS will not be deducted if the employee’s total income is less than INR 2,50,000. The TDS on salary is required to be deducted on the basis of average rate of income tax of the taxpayer in the financial year. However, exceeding above the minimum limit, TDS will be charged at the rate of 20%, if PAN is not possessed by the employee.

TDS Rates for Salaried Individuals

TDS Rates for Senior Citizens

The TDS rates are different for the senior citizens (aged 60 -80 years) and super senior citizens (80 years and above).
Senior Citizens

TDS Rates for Super Senior Citizens

TDS Rates on Insurance Commission

With effect from June 2016, the exemption limit for TDS on Insurance commission is Rs. 15,000, earlier it was 20,000. Section 194 D deals with the provisions and responsibilities of any person who is authorised to pay any income by way of remuneration or reward to the resident. Any resident who has possessed PAN card is charged at the rate of 5%, otherwise 20% if PAN is not furnished.

There are also other forms of commissions charged at different rates mentioned below:

TDS Rate on Income from Services

Under section 194 J, any person is liable to deduct TDS in for the following payment made to resident person except individual or HUF:

a) Fee for professional services

b) Fee for technical services

c) Royalty

d) Remuneration/fee paid to a director

In cases where the payee possesses PAN Card, he/she will be charged at the rate of 10% (excluding cess and surcharge). However, in cases where the payee does not furnish PAN card, he/she is liable to pay higher of the following rates:

Section 194 C is applicable when any payment is made to contractor/sub-contractor for any work which includes-

The rate of TDS applicable on contracts under section 194 C is 1% for Residential Individuals and HUF. However, for resident other than individual or HUF are liable to pay 2%. Payee not possessing PAN card will be liable to pay at the rate of 20%.

TDS Rates on Interest Income

Section 194 A deals with the provisions relating to TDS on interest income such as fixed/recurring deposits. Every payer who is liable to pay interest to a resident is liable to deduct TDS. The payer or deductor can only deduct TDS when the amount of interest paid during the previous year exceeds more than Rs. 10,000 in case of banks and Rs. 5,000 in other cases.

Under section 194A rate of TDS is -