Reduced TDS and TCS Rates

→ 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 rate of TDS and TCS is reduced by 25% which will be effective for the period of 14th May, 2020 to 31st March, 2021. Accordingly reduced TDS and TCS Rates are as follows:

TDS
Sr. No. Section Nature of Transaction Old Rate

(01-04-2020 to 13-05-2020)

Revised/Reduced Rate (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 on securities 10% 7.5%
4 194C Payment to Contractors and sub-contractors 1% (for individual/HUF)
2% (for other assesse)
0.75% (for individual/HUF)
1.50% (for other assesse)
5 194D Insurance Commission 5% 3.75%
6 194DA Payment in respect of Life Insurance Policy 5% 3.75%
7 194EE Payments in respect of deposits under National Savings Scheme 10% 7.5%
8 194F Payments on account of re-purchase of Units by Mutual Funds or UTI 20% 15%
9 194G Commission, prize etc. on sale of lottery tickets 5% 3.75%
10 194H Commission or Brokerage 5% 3.75%
11 194-I(a) Rent on plant and machinery 2% 1.5%
12 194-I(b) Rent on immovable property 10% 7.5%
13 194-IA Payment for acquisition of immovable property 1% 0.75%
14 194-IB Payment of rent by individual or HUF 5% 3.75%
15 194-IC Payment for Joint Development Agreements 10% 7.5%
16 194J Professional fees or Fees for Technical Services (FTS), Royalty, etc. 2% (for FTS, certain royalties, call center)
10% (for other)
1.5% (for FTS, certain royalties, call center)
7.5% (for other)
17 194K Payment of Dividend by Mutual Funds 10% 7.5%
18 194LA Payment of Compensation on acquisition of immovable property 10% 7.5%
19 194LBA(1) Payment of income by Business Trust 10% 7.5%
20 194LBB(i) Payment of income by Investment Fund 10% 7.5%
21 194LBC(1) Income by Securitisation Trust 25% (in the case of Individual/HUF)
30% (in other cases)
18.75% (in the case of Individual/HUF)
22.50% (in other cases)
22 194M Payment  to resident contractors and professionals etc. by Individual and HUF 5% 3.75%
23 194O TDS on e-commerce participants 1% (with effect from 1st October, 2020) 0.75%
TCS
Sr. No. Section Nature of Transaction Old Rate (01-04-2020 to 13-05-2020) Revised/Reduced Rate (14-05-2020 to 31-03-2021)
1 206C(1)(a) Sale of Tendu Leaves 5% 3.75%
2 206C(1)(b) Sale of timber obtained under a forest lease 2.50% 1.875%
3 206C(1)(c) Sale of timber obtained by any other Mode 2.50% 1.875%
4 206C(1)(d) Sale of any other forest produce not being timber/tendu leaves 2.50% 1.875%
5 206C(1)(e) Sale of scrap 1% 0.75%
6 206C(1)(f) Sale of Minerals, being coal or lignite or iron ore 1% 0.75%
7 206C(1C)(a) Grant of license, lease, etc. of Parking lot 2% 1.5%
8 206C(1C)(b) Grant of license, lease, etc. of Toll Plaza 2% 1.5%
9 206C(1C)(c) Grant of license, lease, etc. of Mining and quarrying 2% 1.5%
10 206C(1F) Sale of motor vehicle above 10 Lakhs 1% 0.75%
11 206C(1H) Sale of any other goods 0.1% (with effect from 1st October, 2020) 0.075%

→ However, benefit of reduced TDS/TCS rate will not be available in case TDS/TCS is required to be deducted or collected at a higher rate due to non-furnishing of PAN/AADHAR.

→ The entire provisions were made effective through Press Release i.e. no official notification were issued by CBDT.

→ To get official press release please click here-Press Release

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