Tax Deducted Soruce Other Than Salaries Vol2

8/14/2019 Tax Deducted Soruce Other Than Salaries Vol2

1/15

(1)

(2)

(3)

(4)

(5)

(6

)

(7)

(8)

Section

Payer

Recipient

Natureofpaymen

t

TimeofTDS

Rate

Amount

Exceptions&other

attractingTDS

exemptfrom

TDS

194A

Interest

otherthan

Intereston

Security

Anyperson

N

otan

individualor

H

UF

A

nyresident

Interestotherthanintereston

Securities

Atthetime

ofcreditor

paymentin

cash

through

cheque/draft

etc.,which

everis

earlier.

Asp

errate

info

rce

As10000/-in

caseofa

banking

company,

cooperative

societywhich

isinbusinessof

bankingor

postoffice

5000/-in

othercases

(i)TDSistobedone

wherere

cipientis

individua

lorHUF

whoseto

talsalesfrom

business

orprofession

exceeds

Rs.40lacs.

(ii)NoTD

Stobedone

incaseofInterest

incomes

pecifiedin

clauseiiitoxofsub-

section3

of194(a).

194B

Winnings

from

lotteryor

cross

word,

puzzles

Anyperson

A

nyperson

Incomebywayofw

inning

fromlotteryorcrossword

puzzleorcardgam

eorother

gameofanysort.

Atthetimeof

payment

Asp

errate

inforce

5000/-

rupees

Wherew

inningsare

whollyin

kindorpartly

incasha

ndpartlyin

kindand

thecash

componentisnot

sufficienttomeetthe

TDSliab

ilityistobe

ensured

thatthetax

hasbeenpaidbefore

releasingthewinnings.

64 65

CHAPTER

-12

SummaryTa

bleofTDSProvisions

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

Section

Payer

Recipient

Natureofpayme

nt

TimeofTDS

Ra

te

Amount

Except

ions&other

attractingTDS

exemptfrom

remark

s

TDS

193

Intereston

securities

Anyperson

Resident

InterestofSecurities(defined

underclause28B

ofSection2)

Atthetimeof

Credit/

paymentin

cash/through

cheques/draft,

whicheveris

earlier

As

perrate

inforce

Securitieslisted

specific

allyinSection

193

194

Dividends

Principal

Officerof

Indian

Company/

Company

whichhas

made

arrangement

fordeclaration

ofdividendin

India

Resident

shareholder

Dividendwithinmeaningofsub

clauses(a),(b),(c

)or(d)or(c)

ofclause(22)ofsection(2)

Before

making

paymentin

Cash,t

hrough

Cheque/

warrantof

before

making

distributionor

payment

As

per

ratein

forc

e

Dividendof

lessthan

Rs.2500/-

inF.Y.

(i)NoTDSincaseof

Individu

alshareholders

wherep

aymentisby

accountpayeecheque

(ii)NoT

DSincaseof

dividendsreferredin

Section

115-O


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194BB

Winnings

fromHorse

race

Abook

makerora

person

having

licensefor

horseracing

orfor

arrangingfor

wageringor

thebetting

inanhorse

race.

A

nyperson

WinningsfromHorserace

Atthetimeof

payment

Asp

errate

inforce

2500/-

rupees

....................

194-C

Paymentto

contractors

andSub-

contractors

Anyperson

A

nyresident

Contractualpaymentfor

carryingoutanywo

rkincluding

supplyoflabourinpursuance

ofacontractbetweenthe

contractorandpers

ons

specifiedinsub-cla

useAtoK

of194(C)(1)

Atthetime

ofcreditorat

thetimeof

paymentin

cashby

cheque/draft

etc.which

everis

earlier

1%incase

ofadvertising

contract,

2%in

othe

r

cases.

20,000/-

rupees

NoTDStobedoneby

anindividualoran

HUFonacontractual

payment

ofworkforthe

personalpurposeof

theindividualorthe

HUF

194-D

Anyperson

A

nyresidentIncomebywayofrem

uneration

orreward,whetherb

ywayof

commissionorotherwisefor

solicitingorprocuringinsurance

business.

Atthetimeof

creditor

paymentin

cashorby

cheque/draft

etc.which

everisearlier.

Asp

erthe

rate

in

force.

5000/-

rupees

.........................

(1)

(2)

(3)

(4)

(5)

(6

)

(7)

(8)

194-E

Paymentto

non-

resident,

sportsman

orsports

association

Anyperson

Non-

resident

sportsman

whoisnota

citizenof

Indiaora

non-resident

sports

association

orinstitution.

Incomereferredto

Section

115BBAtonon-res

ident

sportsmanorsports

association.

Atthetimeof

creditor

paymentin

cashorby

cheque/draft

etc.which

everisearlier.

10%

194-EE

Paymentin

respectof

deposit

underNSS

etc.

Anyperson

A

nyperson

PaymentunderNational

SavingsScheme

1987

referredtoinSectio

n

80CC(A)(2)clause(a)

Atthetimeof

payment

20%

2500/-

rupees

Theprov

isionisnot

applicabletoheirsof

theassessee.

194F

Paymenton

accountof

re-purchase

ofunitsby

mutualfund

orUTI

Person

making

specified

payment

A

nyperson

Amountreferredto

insub-

section2ofSec.8

0CCB

Atthetimeof

payment

20%

194G

Commission

etc.onsale

oflottery

tickets

Anyperson

Anyperson

w

hohasbeen

s

tocking,

p

urchasing,

s

ellinglottery

tickets.

Incomebywayofc

ommission,

remunerationorprizeonsuch

tickets.

Atthetimeof

creditor

paymentin

cashorby

cheque/draft

etc.which

everisearlier.

10%

1000/-

rupees

..

.

.

.

.

.

.

.

.

66 67


3/15

(1)

(2)

(3)

(4)

(5)

(6

)

(7)

(8)

194H

Commission

ofbrokerage

Anyper son

notbeing

individualor

HUF

A

nyresident

Anyincomebyway

of

Commissionorbrokerage(not

beinginsurancecommission

referredinsec.194

D)

Atthetime

ofcreditor

paymentin

cashorby

cheque/draft

etc.which

everis

earlier.

10%

2500/-

rupees

i)Theprovisionwill

applyto

anindividual

orHUFwhosetotal

sales/grossreceipts/

turnove

rfrom

businessorprofession

exceeds

Rs.

40,00,00

0/-

ii)NoTD

Stobedone

byBSNL

orMTNLon

anycom

missionor

brokeragepayableto

thePCO

franchisees.

194(I)

Rent

Anyperson

notbeing

individualor

HUF

Any

resident

Incomebywayofrent

Atthetime

ofcreditor

paymentin

cashorby

cheque/draft

etc.which

everis

earlier.

i)10

%for

use

of

mac

hinery,

plan

tor

equipment

ii)15%for

use

ofland

orbuilding

whe

rethe

paye

eisan

indiv

idualor

HUFiii)20%in

case

ofland

orbuilding

whe

rethe

paye

eisan

indiv

idualor

HUF

1,20,000/-

rupees

Theprov

isionwillapply

toanindividualorHUF

whoseto

talsales/

grossreceipts/turn

overfrom

businessor

professio

nexceeds

Rs.40,0

0,000/-

(1)

(2)

(3)

(4)

(5)

(6

)

(7)

(8)

194J

Feesfor

professional

ortechnical

services

Anyperson

notbeing

individual

orHUF

Anyresident

Feesforprofession

alor

technicalservicesorroyaltyor

anysumreferredin

clause(va)

ofSection28

Atthetime

ofcreditor

paymentin

cashorby

cheque/draft

etc.which

everis

earlier.

10%

20,000/-

rupees

i)Theprovisionwill

applytoanindividualor

HUFwhosetotalsales/

grossreturn/turnover

frombus

inessor

professio

nexpenses

Rs.40,00,000/-

ii)Howev

eran

individua

lorHUF

makingp

aymentby

wayoffe

esfor

professio

nalservices

forperso

nalpurposes

isnotliabletodeduct

taxatsource.

194K

Incomein

respectof

units

Entity

making

paymentin

respectof

unitsof

mutualfund/

UTI

A

nyresident

Incomefromunitso

fmutual

fundspecifiedU/s.10(23)or

unitsofUTI

Atthetimeof

creditor

paymentin

cashorby

cheque/draft

etc.which

everisearlier.

10%

2500/-

rupees

Nodeductionistobe

madeunderthis

section

forany

amount

creditedor

paidon

orafter2003.

194L

Paymentof

compensation

onacquisition

ofcapital

asset

Person

acquiring

capital

assetand

paying

compensation

A

nyresident

Sumbeinginnatureof

compensation/enha

nced

compensation/cons

iderationon

accountofcompuls

ory

acquisitionofacap

italasset

underanylaw.

Atthetimeof

paymentof

sumincash

orbycheque

ordraftorany

othermode

whicheveris

earlier.

10%

Nodedu

ctiontobe

madeforany

paymentafter

1.6.2000

.

1,00,000/-

rupees

68 69


4/15

(1)

(2)

(3)

(4)

(5)

(

6)

(7)

(8)

194LA

Paymentof

compensation

onacquisition

ofcertain

immovable

property.

Anyperson

requiring

immovable

propertyand

paying

compensation

A

nyresident

Paymentinnatureof

compensationofen

hanced

compensationorco

nsideration

forcompulsoryacq

uisitionof

immovablepropertyunderany

law(otherthanagricultural

land)

Atthetimeof

creditor

paymentin

cashorby

cheque/draft

etc.which

everisearlier.

10%

1,00,000/-

rupees

...................

196A

Incomein

respectof

unitsof

Non-

residents

Anyperson

making

paymentof

unitsof

mutualfund

orUTI

Anyincomeinresp

ectofunits

ofmutualfundspec

ifiedunder

clause23(D)ofSection10or

UTI

A

nynon-

resident(not

b

einga

c

ompany)or

a

foreign

c

ompany

Atthetime

ofcreditor

paymentin

cashorby

cheque/draft

etc.which

everis

earlier.

20%

Nodedu

ctionistobe

madeforany

paymentafter

1.4.2003

.

..............

196-B

Income

fromUnits

Anyentity

making

paymentof

incomefrom

unitsor

LTCGon

theirtransfer

OffShore

Fund

Incomeinrespecto

funits

referredtoinSectio

n115ABor

bywayoflongterm

capital

gainsarisingfromtransferof

suchunits

Atthetime

ofcreditor

paymentin

cashorby

cheque/draft

etc.which

everis

earlier.

10%

(1)

(2)

(3)

(4)

(5)

(

6)

(7)

(8)

196-C

Incomefrom

foreign

currency

bonds

Anyperson

Non-resident

Incomebywayofinterestor

dividendinrespec

tofbondsor

GDRreferredtoin

Section

115ACorbywayofLTCG

arisingfromtheirtransfer

Atthetime

ofcreditor

paymentin

cashorby

cheque/draft

etc.which

everis

earlier.

10%

Noded

uctionistobe

madein

respectofany

dividendreferredtoin

Section

115A.

196-D

Incomeof

FIIsfrom

Securities

Anyperson

Foreign

Institutional

investor

Incomeinrespect

of

securitiesreferred

toin

clauseaofSub-section(1)of

Section115AD

Atthetimeof

creditor

paymentin

cashorby

cheque/draft

etc.which

everisearlier.

20%

Noded

uctionistobe

madein

respectofany

dividendreferredtoin

Section

115-O.

70 71


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10/15

FORM No. 16A Certificate of deduction of tax at source under Section 203 ofthe Income-tax Act, 1961.

FORM No. 16AA Certificate of deduction of tax at source from incomechargeable under the head Salaries cum return of income.

FORM No. 24 Annual return of deduction of tax at source from incomechargeable under the head Salaries under Section 206 of theIncome-tax Act,1961 for the financial year ending 31st March

FORM NO. 24Q Quarterly statement of TDS for Salaries under Sub section 3of Section 200.

FORM No. 26Q Quarterly statement of deduction of tax u/s 200(3) in respectof payments other than head salary for the quarter endedJune/ September / December /March

FORM No. 26 Annual return of deduction of tax in respect of all paymentsother than salaries under Section 206 of the Income-taxAct,1961 for the financial year ending 31st March .

FORM No. 26AS Annual tax statement u/s 203AA

FORM No. 26QA Particulars required to be maintained for furnishing quarterlyreturns u/s 206A

FORM No.26QAA Quarterly returns u/s 206A for the quarter ended June/

September / December /March.

FORM No. 27A Form for furnishing information with the statement of deduction/ collection of tax at source filed on computer media for theperiod (from to )

FORM No. 27B Form for furnishing information with the statement of collectionof tax at source filed on computer media for the period ending( )

FORM No. 27C Declaration under sub-section (1A) of section 206C to be made

by a buyer for obtaining goods without collection of tax .

FORM No. 27D Certificate of collection of tax at source under sub-section (5)of section 206C of the Income-tax Act, 1961.

FORM No. 27E Annual return of collection of tax under Section 206C in respectof collection of tax for the period ending ( )

FORM No. 27EQ Quarterly statement of collection of tax at source u/s 206C forthe quarter ended June/ September / December /March

FORM No. 27Q Quarterly statement of deduction of tax u/s 200(3) in respectof payments other than salary made to non residents for thequarter ended June/ September / December /March .

FORM No. 49B Application for allotment of TAN

82 83


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(27) Circular No. 586 dt. 28-2-1990 - Members of crew of foreign goingIndian ship, liability to income tax in India and deduction of tax at sourceclarification regarding.

(28) Circular No. 306 dt. 19-6-1981 - Place of payment of direct tax etc.

(29) Circular No. 292 dt. 5-2-1981 - Challan forms for payment of Income taxdeducted at source clarification regarding use of 4th counterfoil.

(30) Circular No. 285 dt. 21-10-1980 - Procedure for regulating refund ofamounts paid in excess of tax deducted and/or deductible.

86


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Tax Payers Information Series - 28

TAX

DEDUCTION

AT SOURCE(TDS)

OTHER THAN

SALARIES

Income Tax DepartmentDirectorate of Income Tax (PR, PP & OL)

Mayur Bhawan, New Delhi-110001

Tax Payers Information Series - 28

TAX

DEDUCTION

AT SOURCE

(TDS)OTHER THAN

SALARIES

Income Tax DepartmentDirectorate of Income Tax (PR, PP & OL)

Mayur Bhawan, New Delhi-110001


14/15

This booklet should not be construed as an

exhaustive statement of the Law. In case of doubt,reference should always be made to the relevant

provisions of the Direct Tax Laws and Rules andwhere necessary, notifications issued from time to

time

PREFACE

The provisions of the Income Tax act relating to Tax Deductionat source (TDS) Other than Salaries are of immense importancein the present scenario when TDS collections account for almost30% of total collection of Direct Taxes.

The Income Tax Act provides for penalty and prosecution forany default in respect of deduction of TDS or deposit of the deductedamount in the Government Account. Thus the Tax Deductors need tobe well conversant with the provisions relating to the Tax Deductionat Source as provided in Sections 193 to 198 of the Income Tax Act.This booklet under the TPI Series is an attempt to put forth thevarious provisions on the subject in a lucid yet precise manner.

This book has been authored by Shri Madhukar Bhagat, DeputySecretary (ITJ), CBDT, New Delhi, who has explained the provisionsin a very simple language. We are grateful to Shri Bhagat for updataingthe booklet. I am sure that this volume will be appreciated and widelyused by the general public.

Any suggestion for its further improvement will always be

welcome.

New Delhi (Amitabh Kumar)Dated : July 4th, 2008 Director of Income Tax

(PR, PP & OL)


15/15

CONTENTS

Topics Pages

CHAPTER-1 INTRODUCTION 1

CHAPTER-2 PAYMENTS SUBJECT TO T.D.S. 3

CHAPTER -3 TDS PROVISIONS APPLICABLE TO 5NON-SALARY INCOME(SECTION-WISE LIST)

CHAPTER-4 PROVISIONS ENJOINING 10DEDUCTION OF TAX

AT SOURCE

CHAPTER-5 TAXATION OF FOREIGN COMPANIES 24

CHAPTER-6 EXEMPTIONS 26

CHAPTER-7 DEPOSIT OF TAX & CREDIT OF TDS 28

CHAPTER-8 DUTIES OF PERSON DEDUCTING TAX 32AT SOURCE

CHAPTER-9 RIGHTS OF TAX - PAYER 39

CHAPTER-10 PENALTY, PROSECUTION AND OTHER 41CONSEQUENCES OF NON-DEDUCTIONAT SOURCE

CHAPTER 11 e-TDS & QUARTERLY STATEMENTS 46OF TDS

CHAPTER- 12 SUMMARY TABLE OF TDS PROVISIONS 64

ANNEXURES

1) Rate for T.D.S. in certain cases 72

2) Prescribed returns regarding TDS u/s 206 79

3) List of Forms 81

4) Important Circulars and Notification 84

Documents

Tax Deducted Soruce Other Than Salaries Vol2