CBDT Press Release Reg Reduction In Rate Of TDS And TCS

The CBDT has issued a press release regarding the reduction in rate of Tax Deduction at Source (TDS) & Tax Collection at Source (TCS).

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 13th  May, 2020

PRESS RELEASE

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

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:-

	Section of	Nature of Payment	Existing Rate	Reduced rate
S. No	the Income-		of TDS	from
	tax Act			14/05/2020 to
				31/03/2021
1	193	Interest on Securities	10%	7.5%
2	194	Dividend	10%	7.5%
3	194A	Interest other than interest	10%	7.5%
		on securities
	194C	Payment of Contractors	1% (individ-	0.75% (indi-
4		and sub-contractors	ual/HUF)	vidual/HUF)
			2% (others)	1.5% (others)
5	194D	Insurance Commission	5%	3.75%
6	194DA	Payment in respect of life	5%	3.75%
		insurance policy
	194EE	Payments in respect of	10%	7.5%
7		deposits under National
		Savings Scheme
	194F	Payments on account of	20%	15%
8		re-purchase of Units by
		Mutual Funds or UTI
9	194G	Commission, prize etc.,	5%	3.75%
		on sale of lottery tickets
10	194H	Commission or brokerage	5%	3.75%

11	194-I(a)	Rent for plant and ma-	2%	1.5%
		chinery
12	194-I(b)	Rent for immovable prop-	10%	7.5%
		erty
13	194-IA	Payment for acquisition	1%	0.75%
		of immovable property
14	194-IB	Payment of rent by indi-	5%	3.75%
		vidual or HUF
15	194-IC	Payment for Joint Devel-	10%	7.5%
		opment Agreements
	194J	Fee for Professional or	2% (FTS, cer-	1.5% (FTS,
		Technical Services (FTS),	tain royalties,	certain royal-
16		Royalty, etc.	call centre)	ties, call cen-
			10% (others)	tre)
				7.5% (others)
17	194K	Payment of dividend by	10%	7.5%
		Mutual Funds
	194LA	Payment of Compensa-	10%	7.5%
18		tion on acquisition of im-
		movable property
19	194LBA(1)	Payment of income by	10%	7.5%
		Business trust
20	194LBB(i)	Payment of income by In-	10%	7.5%
		vestment fund
	194LBC(1)	Income by securitisation	25% (Individ-	18.75% (Indi-
		trust	ual/HUF)	vidual/HUF)
21			30% (Others)	22.5% (Oth-
				ers)
	194M	Payment to commission,	5%	3.75%
22		brokerage etc. by Individ-
		ual and HUF
	194-O	TDS on e-commerce par-	1%	0.75%
23		ticipants	(w.e.f.
			1.10.2020)

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:-

	Section of	Nature of Receipts	Existing	Reduced rate
S. No	the In-		Rate of TCS	from
	come-tax			14/05/2020 to
	Act			31/03/2021
	206C(1)	Sale of
		(a) Tendu Leaves	5%	3.75%
		(b)Timber obtained under a for-	2.5%	1.875%
		est lease
		(c) timber obtained by any other	2.5%	1.875%
1		mode
		(d) Any other forest produce not	2.5%	1.875%
		being timber/tendu leaves
		(e) scrap	1%	0.75%
		(f) Minerals, being coal or lig-	1%	0.75%
		nite or iron ore
	206C(1C)	Grant of license, lease, etc. of	2%	1.5%
		(a) Parking lot
2
		(b) Toll Plaza	2%	1.5%
		(c) Mining and quarrying	2%	1.5%
3	206C(1F)	Sale of motor vehicle above 10	1%	0.75%
		lakhs
	206C(1H)	Sale of any other goods	0.1%	0.75%
4			(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.

 

(Surabhi  Ahluwalia)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT