Reduction in Rate of Tax Deduction at Source (TDS) & Tax Collection at Source (TCS)

Ministry of Finance
Reduction in rate of Tax Deduction at Source

(TDS) & Tax Collection at Source (TCS)
Posted On: 13 MAY 2020 10:30PM by PIB Delhi
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. Section Nature of Existing Rate of Reduced rate

No of the Payment TDS from 14/05/2020
Income- to 31/03/2021
tax Act
1 193 Interest on 10% 7.5%

Securities
2 194 Dividend 10% 7.5%
3 194A Interest other 10% 7.5%

than interest
on securities
4 194C Payment of 1% 0.75%

Contractors (individual/HUF) (individual/HUF)
and sub-
2% (others) 1.5% (others)
contractors
5 194D Insurance 5% 3.75%

Commission
    
6 194DA Payment in 5% 3.75%
respect of life
insurance
policy
7 194EE Payments in 10% 7.5%

respect of
deposits
under
National
Savings
Scheme
8 194F Payments on 20% 15%

account of re-
purchase of
Units by
Mutual Funds
or UTI
9 194G Commission, 5% 3.75%

prize etc., on
sale of lottery
tickets
10 194H Commission 5% 3.75%

or brokerage
11 194-I(a) Rent for plant 2% 1.5%

and
machinery
12 194-I(b) Rent for 10% 7.5%

immovable
property
    
13 194-IA Payment for 1% 0.75%
acquisition of
immovable
property
14 194-IB Payment of 5% 3.75%

rent by
individual or
HUF
15 194-IC Payment for 10% 7.5%

Joint
Development
Agreements
16 194J Fee for 2% (FTS, certain 1.5% (FTS,

Professional royalties, call certain royalties,
or Technical centre) call centre)
Services (FTS),
10% (others) 7.5% (others)
Royalty, etc.
17 194K Payment of 10% 7.5%

dividend by
Mutual Funds
18 194LA Payment of 10% 7.5%

Compensation
on acquisition
of immovable
property
19 194LBA(1) Payment of 10% 7.5%

income by
Business trust
    
20 194LBB(i) Payment of 10% 7.5%
income by
Investment
fund
21 194LBC(1) Income by 25% 18.75%

securitisation (Individual/HUF) (Individual/HUF)
trust
30% (Others) 22.5% (Others)
22 194M Payment to 5% 3.75%

commission,
brokerage etc.
by Individual
and HUF
23 194-O TDS on e- 1% 0.75%

commerce
(w.e.f. 1.10.2020)
participants
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. Section Nature of Receipts Existing Reduced

No of the Rate of rate from
Income- TCS 14/05/2020
tax Act to
31/03/2021
1 206C(1) Sale of
    
(a) Tendu Leaves 5% 3.75%
(b)Timber obtained 2.5% 1.875%

under a forest lease
(c) timber obtained 2.5% 1.875%

by any other mode
(d) Any other forest 2.5% 1.875%

produce not being
timber/tendu leaves
(e) scrap 1% 0.75%
(f) Minerals, being 1% 0.75%

coal or lignite or iron
ore
2 206C(1C) Grant of license, 2% 1.5%

lease, etc. of
(a) Parking lot
(b) Toll Plaza 2% 1.5%
(c) Mining and 2% 1.5%

quarrying
3 206C(1F) Sale of motor vehicle 1% 0.75%

above 10 lakhs
4 206C(1H) Sale of any other 0.1% 0.75%

goods
(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.

*************

RM/KMN
(Release ID: 1623745) Visitor Counter : 23759
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Ministry of Finance

Reduction in rate of Tax Deduction at Source

S. Section Nature of Existing Rate of Reduced rate

1 193 Interest on 10% 7.5%

2 194 Dividend 10% 7.5%

3 194A Interest other 10% 7.5%

4 194C Payment of 1% 0.75%

5 194D Insurance 5% 3.75%

7 194EE Payments in 10% 7.5%

8 194F Payments on 20% 15%

9 194G Commission, 5% 3.75%

10 194H Commission 5% 3.75%

11 194-I(a) Rent for plant 2% 1.5%

12 194-I(b) Rent for 10% 7.5%

14 194-IB Payment of 5% 3.75%

15 194-IC Payment for 10% 7.5%

16 194J Fee for 2% (FTS, certain 1.5% (FTS,

17 194K Payment of 10% 7.5%

18 194LA Payment of 10% 7.5%

19 194LBA(1) Payment of 10% 7.5%

21 194LBC(1) Income by 25% 18.75%

22 194M Payment to 5% 3.75%

23 194-O TDS on e- 1% 0.75%

S. Section Nature of Receipts Existing Reduced

(b)Timber obtained 2.5% 1.875%

(c) timber obtained 2.5% 1.875%

(d) Any other forest 2.5% 1.875%

(e) scrap 1% 0.75%

(f) Minerals, being 1% 0.75%

2 206C(1C) Grant of license, 2% 1.5%

(b) Toll Plaza 2% 1.5%

(c) Mining and 2% 1.5%

3 206C(1F) Sale of motor vehicle 1% 0.75%

4 206C(1H) Sale of any other 0.1% 0.75%

5. Legislative amendments in this regard shall be proposed in due course.

(Release ID: 1623745) Visitor Counter : 23759

Read this release in: Hindi , Bengali , Punjabi , Telugu

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