TDS Rates Chart for FY 2017-18 / AY 2018-19

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CA Sandeep Kanoi

TDS Rates Chart for Financial Year 2017-18/ Assessment Year 2018-19 vide Finance Act 2017 i.e
Budget 2017-18. We have updated the TDS rate chart considering the amendments made by
Finance Act, 2017.

Tax Deducted at Source (TDS) Rate Chart/Slab for Financial Year (FY)
2017-18 / Assessment Year (AY) 2018-19

Section Nature of income When to deduct Rate of TDS

192 Salary Monthly- at the time of payment where On the average

estimated yearly net taxable salary rates on the basis of
exceeds tax free limit. per rates for
individuals. (30% if
no Valid PAN)

192A Payment of accumulated when the amount of 10%

balance due of Employees’
Provident Fund Scheme,
1952, to Employess which is
taxable in their hand
(w.e.f 01-06-15)
payment or aggregate amount of
payment exceeds Rs. 30,000/- (30% if no Valid
Thrashhold Limit Increased to Rs. PAN)
50,000/- from 01.06.2016

193 Interest on securities* At the time of credit or payment, 10%

(See whichever is
note- 1 a) any debentures or earlier, when the (20% if no Valid
)* securities for money issued by amount exceeds Rs. PAN)
or on behalf of any local 10,000/-In case of Debentures
authority or a corporation Threshold limit is Rs. 5000/-
established by a Central,
State or Provincial Act;

b) any debentures issued by a

company where such
debentures are listed on a
recognised stock exchange in
accordance with the Securities
Contracts (Regulation) Act,
1956 (42 of 1956) and any
rules made thereunder;

c) any security of the Central

or State Government;

d) interest on any other

security

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194 Dividend other than the
dividend as referred to in
Section 115O
Before making payment 10%
to’ shareholder, other
than dividend declared (20% if no Valid
U/s. 115O, when PAN)
amount exceeds Rs.
2,500/-

194A Interest other than At the time of credit or payment, 10%

(See “Interest on securities” whichever is
note- 2 earlier, when the (20% if no Valid
to 5)* amount exceeds Rs. PAN)
5,000/-. However, limit is Rs. 10,000/- in
case of interest credited by banks
including co‑operative banks to its
members.

194B Income by way of winnings Winning from Lotteries 30%

/194BB from lotteries, crossword
puzzles, card games and
other games of any sort and
Income by way of winnings
from horse races
5000 (1-April-2016 to 31-May-2016) (30% if no Valid
PAN)
10000 (1-Jun-2016 to 31-Mar-2017)
HORSE RACE

5000 (1-April-2016 to 31-May-2016)

10000 (On or after 1-Jun-2016 )

194C Payment to At the time of credit or payment, 2% – For payments

(See contractors/ sub- whichever is earlier, when the amount of to
note- contractors a particular contract exceeds Rs. contractor/Sub-
6)* 30,000/- or the total contractor
amount of contract who is not an
during the whole year exceeds Rs. Individual/HUF(20%
75,000/- (Increased to Rs. 1 Lakh wef if no Valid PAN)
01.06.2016)
1% – For payment
to
contractor/Sub-
contractor
who is an
Individual/HUF(20%
if no Valid PAN)

194D Insurance Commission At the time of credit or payment, 10% from

whichever is earlier when the amount 01.04.2016 to
exceeds 31.05.2016

Rs. 20000 (1-April-2016 to 31-May- 5% wef

2016) or 01.06.2016)

Rs. 15000 (On or after 1-June-2016 ) (20% if no Valid

PAN)

(Please refer Note

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194DA Payment under life At the time of payment when the amount 2%
insurance policy or the total amount during the whole year
(including Bonus) exceeds Rs. 1 ,00,000/- (1% wef
01.06.2016)

(20% if no Valid
PAN)

194E Payment to Non-Resident At the time of credit or payment, 20%

Sportsmen or Sports whichever is earlier
Association (20% if no Valid
PAN)

194EE Payment in respect of deposit
under National Savings
scheme (NSS)
At the time of credit or payment, 20% (1-April-2016
whichever is earlier when the amount to 31-May-2016)
exceeds Rs. 2500/-
10% (on or after 1-
Jun-2016)

(20% if no Valid
PAN)

194F Payment on account of At the time of credit or payment, 20%

repurchase of unit by Mutual whichever is earlier
Fund or Unit Trust of India (20% if no Valid
PAN)

194G Commission on sale of lottery At the time of credit or payment, 10% from
tickets whichever is earlier when the amount 01.04.2016 to
exceeds 31.05.2016

Rs. 1,000/- (1-April-2016 to 31-May- 5% wef 01.06.2016

2016) or
(20% if no Valid
Rs. 15000 wef. 1 st June-2016 PAN)

194H Payment of commission At the time of credit or payment 10% from

brokerage whichever is earlier when the amount 01.04.2016 to
exceeds Rs. 5000/- (Rs. 15000 WEF 1- 31.05.2016
June-2016)
5% wef 01.06.2016

(20% if no Valid
PAN)

194I Rent At the time of credit or payment, 10% – If rent is for

(See whichever is earlier, when the amount land,
note-7) exceeds Rs. 1,80,000/- building or
furniture(20% if no
Valid PAN)

2% – If the rent is
for
Machinery, Plant or
Equipment(20% if
no Valid PAN)

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194IA Payment on transfer of certain At the time of credit or payment, 1%
((See immovable property other whichever is earlier, when the land is
note-8) than agriculture land. situated in specified (20% if no Valid
area when amount exceeds Rs. 50 lacs PAN)

194IB Rent payable by an individual
or HUF not covered u/s. 194I
(W.E.F. from 01.06.2017)
Tax shall be deducted on such income at Threshold limit Rs.
the time of credit of rent, for the last 50,000/- per month.
month of the previous year or the last TDS to be deducted
month of tenancy if the property is @ 5%
vacated during the year, as the case
may be, to the account of the payee or at Read-
the time of payment thereof in cash or by
issue of a cheque or draft or by any TDS on rent made
other mode, whichever is earlier. applicable to
Individual / HUF
even if no Tax Audit

194IC Payment of Consideration At the time of credit or payment, Threshold limit Rs.
(not being in kind) under Joint whichever is earlier. Nil TDS to be
Development Agreement or deducted @ 10%
other similar agreement (Applicable from
01.04.2017)

Read- Budget
2017-Changes in
capital gain
computation- joint
development
agreement

194J Any sum paid by way of At the time of credit or payment, 10%
whichever is earlier, when the amount
a) Fee for professional exceeds Rs. 30,000/- 2% in case of
services, payments received
or credited to a
b) Fee for technical services payee, being a
person engaged
c) Royalty, only in the business
of operation of call
d) center wef
Remuneration/fee/commission 01.06.2017.
to a director or
(20% if no Valid
e) For not carrying out any PAN)
activity in relation to any
business Read- S.194J TDS
rate proposed at
f) For not sharing any know- 2% on Call Center
how, patent, copyright etc. business Income

194K Income in respect of Units Omitted w.e.f 01.06.2016 as Section was non-operational.

194L Payment of Compensation on Omitted w.e.f 01.06.2016 as Section was non-operational

acquisition of Capital Asset

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194LA Payment on transfer of certain At the time of credit or payment 10%
immovable property other whichever is earlier if amount exceeds
than agricultural land (20% if no Valid
Rs. 200000 between 1-April-2016 to 31- PAN)
(Read Note-8) May-2016 or

Rs. 250000 after 1-June-2016

194LB Payment of interest on At the time of credit or payment 5%#

infrastructure debt fund to whichever is earlier
non-resident or foreign (20% if no Valid
company PAN)

Sec Income in respect of 25% For Residents individual or HUFs

194LBC investment in securitisation
trust. (From 01.06.2016)
and 30% For other Residents
40% For Non Residents Companies and
30% For Non Residents other than
Company

194LBA Certain income from units of a At the time of credit or payment 10% #
business trust(applicable from whichever is earlier
01.10.2014 (20% if no Valid
PAN)

194LBA 194LBA – Certain income At the time of credit or payment 5%#

from units of a business trust whichever is earlier
to non-resident (applicable (20% if no Valid
from 01.10.2014) PAN)

194LBB Investment fund paying an At the time of credit or payment 10% from 1-April-
(See income to a unit holder [other whichever is earlier 2016 to 31-May-
note- than income which is exempt 2016
10) under Section 10(23FBB)]
shall deduct tax therefrom 40% For Non
(with effect from 01.06.2015). Residents (1-Jun-
2016 to 31-Mar-
2017)

30 % For Non
Residents (on or
after 1-Jun-2016 )

(20% or Rate
Applicable
whichever is higher
if no Valid PAN)

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 194LC Payment of interest by an
Indian Company or a business
trust in respect of money
borrowed in foreign currency
under a loan agreement or by
way of issue of long-term
bonds (including long-term
infrastructure bond)
194LD Payment of interest on rupee
(See denominated bond of an
note-9) Indian Company or
Government securities to a
Foreign Institutional Investor
or a Qualified Foreign Investor
195 Other Sums
196A Foreign comp unit holder of
MF
196B – Income from units (including
long-term capital gain on
transfer of such units) to an
offshore fund
196C Income from foreign currency
bonds or GDR (including long-
term capital gains on transfer
of such bonds) (not being
dividend)
196D Income of FIIs from securities
# Surcharge, education cess and secondary and higher education cess will be added to the above tax rate, as
applicable.
Notes:
1. Securities includes listed as well as unlisted debentures issued by companies in which public are substantially
At the time of credit or payment 5%#
whichever is earlier
Concessional rate
of five per cent TDS
on interest
payment under this
section will now be
available in respect
of borrowings made
before the 1st July,
2020.
Read- Extension of
period of
concessional tax
rate on interest on
ECB
At the time of credit or payment 5%#
whichever is earlier
At the time of credit or payment Average rates as
whichever is earlier applicable
(See Note 17 & 18)
At the time of credit or payment 10 % In case of a
whichever is earlier Company
20% In the case of
a person other
than a company
At the time of credit or payment 10%
whichever is earlier
(20% if no Valid
PAN)
At the time of credit or payment 10%
whichever is earlier
(20% if no Valid
PAN)
At the time of credit or payment 20%
whichever is earlier
(20% if no Valid
PAN)
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interested.

2. In case of interest payment on time deposits by co-operative banks to its members the TDS Provision is
applicable from 1-6-2015.

3. TDS provisions under Section 194A shall not apply to income paid by way of interest on the compensation
amount awarded by the Motor Accidents Claims Tribunal where the amount of such income does not exceed Rs.
50000/- and further TDS on interest payment on compensation amount awarded by Motor Accident Claim
Tribunal is deductible at the time of payment instead of accrual (WEF 01.06.2015)- Section 194A- Amendment in
provisions related to TDS on interest

4. As per amended definition of ‘time deposits’ under section 194(3) it now includes include recurring deposits
also. This implies that now, interest on recurring deposits is also subject to TDS.

5. Bankwise Income to be considered for TDS deduction on time deposits instead of Branch- Section 194A-
Amendment in provisions related to TDS on interest

6. a) From 01.06.2015 – If the payment is made to contractor/sub contractor in transport business, no TDS shall
be deducted at source in the course of payment for plying, hiring or leasing goods carriages if the contractor
provides PAN Number and such contractor owns ten or less goods carriage at any time during the previous year
and furnishes a declaration to that effect. (WEF 01.06.2015)- TDS deductible on Payment to Transporters owing
more than 10 goods carriage

b) Up to 31.05.2015– No deduction shall be made from any sum credited or paid or likely to be credited or paid
during the previous year to the account of a contractor during the course of business of plying, hiring or leasing
goods carriages on furnishing of his Permanent Account Number, to the person paying or crediting such sum.

7. No TDS deduction shall be made under section 194-I of the Act where the income by way of rent is credited or
paid to a business trust, being a real estate investment trust (REIT), in respect of any real estate asset held
directly by such REIT. (wef 01-04-2015) – Read More-Tax Regime for Real Estate Investment Trusts and
Infrastructure Investment Trusts

8. In case of section 194LA, the sub-registrar shall register the document only after the challan for payment of
TDS is presented before him.

It is proposed to amend the section 194LA to provide that no deduction shall be made under this section where
such payment is made in respect of any award or agreement which has been exempted from levy of income-tax
under section 96 (except those made under section 46) of RFCTLARR Act. This amendment will take effect from
1st April, 2017. No tax deduction on compensation under RFCTLAAR Act, 2013

9. Concessional rate of 5% withholding tax on interest payment under section 194LD will now be available on
interest payable before the 1st July, 2020.- Extension of eligible period of concessional tax rate U/s. 194LD

10. TDS on Income in respect of units of investment fund- New section 194LBB to provide for TDS @ 10% on
payments to a unit holder in respect of units of Investment Fund u/s 115UB – Pass through status to Category –I
and II Alternative Investment Funds

11. Section 195 has been amended to provide furnishing of information in Form 15CA and 15CB for payments to
a non resident/foreign company irrespective to the fact that whether or not those payments were chargeable
under Income tax Act . (wef 01-06-2015) – Rationalisation of provisions relating to TDS and TCS

12. If the payment is made to a person (including non resident) whose receipts are subject to TDS shall
mandatory furnish his PAN to the deductor (even though the deductee file a declaration in form no. 15G or 15H)
otherwise the deductor shall deduct the TDS at higher of the following rates-

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– The applicable rate prescribed in the Act or

– The rate mentioned in the Finance Act or

– 20%

13. Surcharge on TDS on payments made to non-resident person and company other than a domestic
company

a) Surcharge Rate (%)

Non Residents other than company (if income exceeds Rs. 50 Lakh but not exceeds Rs. 1 Crore) 10%

Non Residents other than company (if income exceeds Rs. 1 Crore) 15%

Non Resident companies if income is between Rs. 1 Crore and 10 Crore 2%

Non Resident companies if income is greater than Rs. 10 Crore 5%

Surcharge on Coperative Society & Firms in case of Non-Residents (if income exceeds Rs. 1 crore) 12%

b) Surcharge on tax is not deductible/collectible at source in case of resident individual/ HUF /Firm/LLP/ AOP /
BOI/Domestic Company in respect of payment of income other than salary.

14. Education Cess on payments made to non-resident person and company other than a domestic
company

a) Non Resident & Foreign Companies– “Education Cess on income-tax” and “Secondary and Higher
Education Cess on income-tax” shall continue to be levied at the rate of two per cent. and one per cent.
respectively, of income tax including surcharge wherever applicable.

b) Other Resident Assessees- Education Cess is not deductible/collectible at source in case of resident
Individual/HUF/Firm/ AOP/ BOI/ Domestic Company in respect of payment of income other than salary.Education
Cess @ 2% plus secondary & Higher Education Cess @ 1% is deductible at source in case of non-residents and
foreign company.

15. NO TDS on service tax component comprised in the payments made to residents – Circular No. 1/2014
, Dated 13-1-2014

16. Amendment in TDS Rates & Threshold limit wef 01.06.2016

17. Deduction under Section 195 of Income Tax Act, 1961, In the case of a person other than a company
who is not resident in India-

Section 195: Payment of any other sum to a Non-resident TDS

Rate

a) Income in respect of investment made by a Non-resident Indian Citizen 20

b) Income by way of long-term capital gains referred to in Section 115E in case of a Non-resident 10
Indian Citizen

c) Income by way of long-term capital gains referred to in sub-clause (iii) of clause (c) of sub-Section 10
(1) of Section 112

d) Income by way of short-term capital gains referred to in Section 111A 15

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 e) Any other income by way of long-term capital gains [not being long-term capital gains referred to in 20
clauses (33), (36) and (38) of Section 10]

f) Income by way of interest payable by Government or an Indian concern on moneys borrowed or 5

debt incurred by Government or the Indian concern in foreign currency (not being income by way of
interest referred to in Section 194LB or Section 194LC)

g) Income by way of royalty payable by Government or an Indian concern in pursuance of an 10

agreement made by it with the Government or the Indian concern where such royalty is in
consideration for the transfer of all or any rights (including the granting of a licence) in respect of
copyright in any book on a subject referred to in the first proviso to sub-section (1A) of Section 115A of
the Income-tax Act, to the Indian concern, or in respect of any computer software referred to in the
second proviso to sub-section (1A) of Section 115A of the Income-tax Act, to a person resident in
India

h) Income by way of royalty [not being royalty of the nature referred to point g) above E] payable by 10
Government or an Indian concern in pursuance of an agreement made by it with the Government or
the Indian concern and where such agreement is with an Indian concern, the agreement is approved
by the Central Government or where it relates to a matter included in the industrial policy, for the time
being in force, of the Government of India, the agreement is in accordance with that policy

i) Income by way of fees for technical services payable by Government or an Indian concern in 10
pursuance of an agreement made by it with the Government or the Indian concern and where such
agreement is with an Indian concern, the agreement is approved by the Central Government or
where it relates to a matter included in the industrial policy, for the time being in force, of the
Government of India, the agreement is in accordance with that policy

j) Any other income 30

18. Deduction under Section 195 of Income Tax Act, 1961, where the company is not a domestic
company-

Section 195: Payment of any other sum TDS

Rate

a) Income by way of long-term capital gains referred to in sub-clause (iii) of clause (c) of sub-section 10
(1) of Section 112

b) Income by way of short-term capital gains referred to in Section 111A 15

c) Any other income by way of long-term capital gains [not being long-term capital gains referred to in 20
clauses (33), (36) and (38) of Section 10]

d) Income by way of interest payable by Government or an Indian concern on moneys borrowed or 20

debt incurred by Government or the Indian concern in foreign currency (not being income by way of
interest referred to in Section 194LB or Section 194LC)

e) Income by way of royalty payable by Government or an Indian concern in pursuance of an 10

agreement made by it with the Government or the Indian concern after the 31st day of March, 1976
where such royalty is in consideration for the transfer of all or any rights (including the granting of a
licence) in respect of copyright in any book on a subject referred to in the first proviso to sub-section
(1A) of Section 115A of the Income-tax Act, to the Indian concern, or in respect of any computer
software referred to in the second proviso to sub-section (1A) of Section 115A of the Income-tax Act,
to a person resident in India

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 f) Income by way of royalty [not being royalty of the nature referred to in point e) above C] payable by
Government or an Indian concern in pursuance of an agreement made by it with the Government or
the Indian concern and where such agreement is with an Indian concern, the agreement is approved
by the Central Government or where it relates to a matter included in the industrial policy, for the time
being in force, of the Government of India, the agreement is in accordance with that policy—

A. where the agreement is made after the 31st day of March, 1961 but before the 1st day of April, 50
1976

B. where the agreement is made after the 31st day of March, 1976 10

g) Income by way of fees for technical services payable by Government or an Indian concern in
pursuance of an agreement made by it with the Government or the Indian concern and where such
agreement is with an Indian concern, the agreement is approved by the Central Government or
where it relates to a matter included in the industrial policy, for the time being in force, of the
Government of India, the agreement is in accordance with that policy—

A. where the agreement is made after the 29th day of February, 1964 but before the 1st day of April, 50
1976

B. where the agreement is made after the 31st day of March, 1976 10

h) Any other income 4

19. In order to reduce compliance burden in the case of Individuals and HUFs, it is proposed to amend section
197A so as to make them eligible for filing self-declaration in Form.No.15G/15H for non-deduction of tax at
source in respect insurance commission referred to in section 194D. This amendment will take effect from 1st
June, 2017. Read- Budget 2017: No TDS deduction on Insurance Commission on Filing of Form 15G/15H

20. Upon self-certification, no tax will be deducted on rental payments if the income of the payee does not exceed
the maximum amount not chargeable to tax subject to provisions of section 194IB.

21. An Individual or a Hindu Undivided Family whose total sales , gross receipts or turnover from business or
profession carried on by him exceeds the monetary limits under Sec.44AB during the preceding financial year
shall also be liable to deduct tax

22. Section 206AA of the Income-tax Act so as to provide that TDS shall not be deducted at a higher rate in case
of non-residents not having PAN, subject to prescribed condition.

23. Deduction at lower or nil rate requires certificate u/s.197,which will take effect from the day it is issued. It
cannot 24. Interest and penalty will be applicable as per section 201 and section 271c. Imprisonment can be in
cases of continuous failure ranging from 3 months to 7 years

25. Failure to file quarterly TDS Returns in time- late fee @ Rs. 200/- per day (maximum of TDS amount) Section
234E.

26. Due dates for deposit of TDS are as under

Deductions made in the month of March On or before 30th April

Deductions made other than month of March and tax on perquisites On or before seven days from the
opted to be deposited by employer close of the month

27. Due dates for TDS quarterly Returns

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 Due dates for TDS quarterly Returns

Quarter Period Due Date

Q1 1 Apr – 30 June 31st July

Q2 1 July – 30 Sept 31st Oct

Q3 1 Oct – 31 Dec 31st Jan

Q4 1 Jan – 31 Mar 31 st May

(Disclaimer- We have taken all the effort to make the information 100% accurate but readers are requested to
verify at their end with Relevant Acts and Rules before replying on above. In case of any discrepancy the same
can be informed to us through comment at the end of article or by sending an email at info @taxguru.in )

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