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The Changes proposed by the Budget 2015-16 (Finance Bill 2015) related to deduction of tax at source under Chapter XVII of the Income tax Act, 1961 are as under:
1. Section 194A amended to expressly provide that from 1st June, 2015 the exemption provided from deduction of tax from payment of interest to members by a co-operative society under section 194A(3)(v) ) of the Act shall not apply to the payment of interest on time deposits by the co-operative banks to its members.
2. It is proposed to amend the definition of ‘time deposits’ as per section 194(3) to include recurring deposits also. This implies that now, interest on recurring deposits is also subject to TDS.
3. 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/-
4. It is proposed to amend Section 194C(6) to provide non deduction of tax for payments to a contractor in the business of plying, hiring or leasing goods carriages, where such contractor owns ten or less than ten goods carriages at any time during the previous year and furnishes a declaration Format of declaration click here >> to that effect along with his Permanent Account Number, to the person paying or crediting such sum. (wef 01-06-2015)
5. No TDS to be deducted u/s 194I where the rent is credited or paid to a business trust, being a real estate investment trust, in respect of any real estate asset, referred to in clause (23FCA) of section 10, owned directly by such business trust.(wef 01-06-2015)
6. Section 194LBA is amended to provide TDS on distribution of income by a business trust being a real estate investment trust, by way of renting or leasing or letting out any real estate asset owned directly by such business trust.
7. New section 194LBB to provide for TDS @ 10% on payments to a unit holder in respect of units of Investment Fund u/s 115UB
8. Concessional rate of tds @ 5% u/s 194LD shall now be available on interest payable till 30-06-2017.
9. 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)
The updated chart of tax Deduction at Source for FY 2015-16 or AY 2016-17 is as under:
|
Section |
Nature of Payment |
Rate-HUF/Ind % |
Rate-Others % |
|
192 |
Salaries |
Average rate |
- |
|
193 |
Interest on Securities > Rs.10,000 |
10 |
10 |
|
194 |
Deemed dividend u/s.2(22)(e) Dividends other than listed companies |
10 |
10 |
|
194A |
Interest other than Interest on Securities (including recurring deposits wef 01-06-2015) : |
10 |
10 |
|
194B |
Lottery / Cross Word Puzzle > Rs. 10000/- |
30 |
30 |
|
194BB |
Winnings from Horse Race > Rs. 5,000/- |
30 |
30 |
|
194C
|
Contracts: |
|
2 |
|
194D |
Insurance Commission > Rs. 20,000 |
10 |
10 |
|
194DA |
(w.e.f. 01/10/2014) |
02 |
- |
|
194E |
Payments to non-resident sportsmen or sports associations |
20 |
20 |
|
194EE |
Refund of NSS > Rs.2,500/- |
20 |
- |
|
194F |
Repurchase of units by MF/UTI |
20 |
20 |
|
194G |
Commission on sale of lottery tickets > Rs.1,000 |
10 |
10 |
|
194H |
Commission or Brokerage > Rs. 5,000 |
10 |
10 |
|
194I |
Rent of Machinery, Plant or Equipment > Rs. 1,80,000 |
2% |
2% |
|
Land, building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings > Rs. 1,80,000 |
10% |
10%
|
|
|
194IA |
Transfer of immovable property other then agricultural Land >50 Lakhs |
1% |
1% |
|
194J |
Professional/ Technical charges/Royalty & Non-compete fees /payments to directors > Rs. 30,000 |
10% |
10% |
|
194LA |
Compensation on acquisition of immovable property > Rs.2,00,000 |
10 |
10 |
|
194LB |
Interest from an Infrastructure Bond |
5 |
5 |
|
194LBA |
Income in the nature of interest received or receivable from a special purpose vehicle, distributed by a business trust to its unit holders. Distribution of income by a business trust being a real estate investment trust (wef 01-06-2015) |
10 Rates specified in Part II First Schedule |
10 Rates specified in Part II First Schedule |
|
194LBB |
Payments to a unit holder in respect of units of Investment Fund u/s 115UB |
10 |
10 |
|
194LC |
Interest to Non Resident from Indian company/business trusts engaged in certain business. |
5 |
5 |
|
194LD |
Interest on certain Govt Bonds/Securities payable on or after 01-06-2013 but before 01-06-2017 |
5 |
5 |
|
195/196B/196C/196D/ 196E |
Payment to non-residents |
Rates in force |
Rates in force |
Notes:
1 . Due dates for deposit of TDS (Rule 30) are as under:
|
Government Deductors: |
|
|
Payment of tax without production of Income tax challan |
On the same day |
|
Payment with challan or for tax on perquisites opted to be deposited by employer |
On or before 7 days from the end of the month, in which tax deducted. |
|
Non-Government Deductors: |
|
|
Deductions made in the month of March |
On or before 30 th April |
|
Deductions made other than month of March and tax on perquisites opted to be deposited by employer |
On or before seven days from the close of the month |
2. Where income referred in Sections 193, 194A, 194C, 194D, 194G, 194H,194I & 194J is credited to account of payee as on date up to which accounts are made, TDS has to be deposited in Government Account onor before 30 th April of the next FY.
3. An Individual or a Hindu Undivided Family whose total sales,gross receipts or turnover from business or profession carried on by himexceeds the monetary limits under Clause (a) or (b) of Sec.44AB during the preceding financial year shall also be liable to deduct tax u/s.194A,194C,194H, 194I & 194J.
4. No education/higher education cess is to be added on tax deducted on non-salary payments made to resident taxpayers.
5. Surcharge is applicable to deductions under section 193, 194, 194A, 194B, 194BB, 194C, 194D ,194DA, 194E, 194EE, 194F,194G, 194H, 194-I,194-IA, 194J, 194LA, 194LB,194LBA, 194LC, 194LD, 195, 196B, 196C and 196D
(a) in the case of every company, other than a domestic company:
(i) at the rate of 2% where incomes paid or likely to be paid exceeds one crore rupees but does not exceed ten crore rupees;
(ii) at the rate of 5% where the income paid or likely to be paid exceeds ten crore rupees.
(b) in the case of every person other than company at the rate of 10%, where the aggregate incomes paid or likely to be paid exceeds one crore rupees;
6. w.e.f. 01-06-2015 No deduction u/s194C are required on payments to a contractor (who owns not more than 10 goods carriage) during the course of business of plying, hiring or leasing goods carriages on furnishing a declaration and his PAN u/s194C.
7. I n case of an office of the Government, where TDS under sub-section (1À) of section 192 has
been paid to the credit of the Central Government without the production of a challan, the Pay and Accounts Officer/Treasury Officer/ Cheque Drawing and Disbursing Officer etc. shall deliver or cause to be delivered to the prescribed income-tax authority, a statement in such form, verified in such manner, setting forth such particulars and within such time as may be prescribed. (wef 01-06-2015)
8. As per section 206AA, the Rate of TDS will be 20% in all cases,if PAN is not quoted by the deductee (including transporter) w.e.f. 01-04-2010
9. Deduction at lower or nil rate requires certificate u/s.197,which will take effect from the day it is issued. It cannot be usedretrospectively.
10. If TDS certificate is lost, duplicate may be issued on aplain paper giving necessary details marking it as duplicate.
11. Even if the recipient of payment has shown it in his income-tax return and paid the taxes thereon, the deductor who has failed todeduct tax will be liable to pay interest and penalty.
12. Consequences of Default
• Interest @ 1.00% p.m. from the date on which tax was deductible to the date of deduction. (Section 201)
• Interest@ 1.50% p.m. from the date on which tax is deducted to the date of its paid. (Section201)
• Penalty equal to the tax that was failed to be deducted or remitted. (Section 271C)
• In case offailure to remit the tax deducted, rigorous imprisonment ranging from 3 monthsto 7 years and fine can be levied. (Section276B)
• Failure to file quarterly TDS Returns in time- late fee @ Rs. 200/- per day (maximum of TDS amount) Section 234E
13. The due dates for filing TDS quarterly Returnsare as per the following table:
|
Quarter |
Period |
Government Deductor |
Non-Govt. Deductor |
|
Q1 |
1 Apr - 30 June |
31st July |
15th July |
|
Q2 |
1 July - 30 Sept |
31st Oct |
15th Oct |
|
Q3 |
1 Oct - 31 Dec |
31st Jan |
15th Jan |
|
Q4 |
1 Jan - 31 Mar |
15th May |
15th May |
Revised and Latest TDS Rate Chart For FY 2015-16 and AY 2016-17 after Budget 2015-16 Amendments |28-02-2015|
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