These are the new TDS, TCS rates applicable on fixed deposits, dividends, contracts and more

These are the new TDS, TCS rates applicable on fixed deposits, dividends, contracts and more
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  • FM Nirmala Sitharaman announced a 25% reduction in TDS and TCS rates on a total of 35 items.
  • The new TDS and TCS rates will leave an additional cash of ₹50,000 crore in the Indian financial system.
  • According to the press release from the Ministry of Finance, these reduced TDS and TCS rates are applicable from May 14, 2020.
Finance Minister Nirmala Sitharaman announced a reduction in tax deducted at source (TDS) and tax collected at source (TCS) rates by 25% as part of the Indian government’s ₹20 lakh crore Covid-19 stimulus package. These reduced TDS and TCS rates are applicable with effect from May 14, 2020.

Making the announcement, FM Sitharaman said that this move will leave an additional cash of ₹50,000 crore in the Indian financial system.


What is TDS and TCS?
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TDS and TCS are two modes by which the tax is collected and paid at the source of income. This ensures a regular flow of tax revenue to the government and prevents tax evasion. Additionally, this also helps reduce the sudden shock of tax burden on the taxpayers at the end of the year.

What are the reduced rates of TDS and TCS?

According to the press release from the Ministry of Finance, these reduced TDS and TCS rates are applicable from May 14, 2020.

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Here are the new rates of TDS from May 14, 2020:

SectionNature of paymentTDS Rate from 14/05/20 (%)TDS Rate till 13/05/20 (%)
192APremature withdrawal from EPF1010
193Interest on securities – 8% Savings (Taxable) Bonds, 2003 or 7.75% Savings (Taxable) Bonds, 2018 during the financial year7.510
193Interest on securities – Interest on securities for money issued by or on behalf of any local authority/ statutory corporation, listed debentures of a company (other than demat form), any other interest on securities7.510
194Dividends7.510
194AInterest (Banking co., co-operative society engaged in banking, post office)7.510
194AInterest (Any other person)7.510
194BWinning from lotteries3030
194BBWinning from Horse race3030
194CContractor-Single transaction-Individual/HUF0.751
-Others1.52
194CContractor – Consolidated Payment During the F.Y.
– Individual/HUF0.751
– Others1.52
194CTransporter (44AE) declaration with PAN00
194DInsurance commission – Other than Company3.755
– Company7.510
194DAMaturity of Life insurance policy3.755
194ENon-resident sportsmen or sports associationNot ApplicableNot Applicable
194EENSS7.510
194FRepurchase units by MFs1520
194GCommission-Lottery3.755
194HCommission /Brokerage3.755
194IRent of – Plant/Machinery/Equipment1.52
– Land and Building/Furniture & Fixture7.510
194IATransfer of certain immovable property other than agriculture land0.751
194IBRent by Individual/HUF3.755
194ICPayment under Joint Development Agreements to Individual/HUF7.510
194JProfessional Fees7.510
194JTechnical Fees (w.e.f. 01.04.2020)1.52
194JPayment to call centre operator (w.e.f. 01.06.2017)1.52
194JDirector’s fees7.510
194KPayment of any income in respect of7.510
(a) units of a mutual fund as per section 10(23D); or
(b) the units from the administrator; or
(c) units from specified company
(w.e.f. 01.04.2020)
194LACompensation on transfer of certain immovable property other than agriculture land7.510
194LBIncome by way of interest from infrastructure debt fund00
194LBAIncome from units of business trust
– interest received or receivable from a special purpose vehicle; or7.510
– dividend referred to in sub-section (7) of section 115-O7.510
194LBADistribution of rental income to unit holders
– Other than Company7.510
– Company7.510
194LBBIncome in respect of units of investment fund
– Other than Company7.510
– Company7.510
194LBCIncome in respect of investment in securitization fund
Individual/HUF18.7525
Company22.530
Other Person22.530
194LCIncome by way of interest by an Indian specified company to a non-resident/foreign company on foreign currency approved loan / long-term infrastructure bonds from outside India00
194LCIncome by way of interest by an Indian specified company on rupee denominated bond / any long-term bonds from outside India, which is listed only on a recognized stock exchange located in any International Financial Services Centre00
194LDInterest on certain bonds from Govt. securities00
194MCertain payments by Individual/HUF3.755
194NPayment of certain amount in cash22
194NPayment of certain amount in cash (first proviso of section 194N- assessee has not
furnished return for
last 3 assessment years
) if-
– Amount is more than Rs.20 lakh but up to Rs. 1 crore22
– Amount exceeds Rs. 1 crore55
194-OApplicable for e-commerce operator for the sale of goods or provision of services facilitated by it through its digital or electronic facility or platform (w.e.f. 01.04.2020)0.751
195Income of Investment made by an NRI00
195Long-term capital gain
– Under Section – 115E/112(1)(c)(iii)/112A00
– Any Other Gains00
195Short-term capital gain – 111A00
195Royalty00
195Fees for technical services00
195Interest income payable by Govt./Indian concern (other than section 194LB or 194LC)00
195Any Other Income – Other than Company00
– Company00
196AIncome in respect –00
– of units of a Mutual Fund specified under clause (23D) of section 10; or
– from the specified company referred to in the Explanation to clause (35) of section 10
196BIncome from units to an offshore fund00
196CIncome from foreign currency bonds or GDR of an Indian company00
196DIncome of foreign Institutional Investors from securities (not being interest referred to in section 194LD, not being dividend referred in section 115-O, not being capital gain from transfer of securities referred in section 115AD)00



Here are the new rates of TCS from May 14, 2020:
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SectionNature of paymentTCS Rate from 14/05/20 (%)TCS Rate till 13/05/20 (%)
206CScrap0.751
206CTendu leaves3.755
206CTimber obtained under a forest lease or other mode1.8752.5
206CAny other forest produce not being a timber or tendu leaves1.8752.5
206CAlcoholic liquor for human consumption and Indian made foreign liquor11
206CParking lot, toll plaza, mining and quarrying (other than mining and quarrying of mineral oil, petroleum and natural gas)1.52
206CMinerals, being coal or lignite or iron ore0.751
206CSale of motor vehicle of the value exceeding Rs. 10 Lacs0.751
206CRemittance out of India under the Liberalized Remittance Scheme of the RBI of the value exceeding 7 Lacs in a financial year55
206CSale of overseas tour programme package55
206CRemittance out of India for education under the Liberalized Remittance Scheme of the RBI of the value exceeding 7 Lacs in a financial year0.50.5
206CSale of any goods (other than goods exported out of India or goods given in the above points) of the value exceeding 50 Lacs0.0750.1


See also:

Finance Minister Nirmala Sitharaman reveals the details of Modi's ₹20 lakh crore stimulus package
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Top highlights from Finance Minister Nirmala Sitharaman's second tranche of COVID-19 stimulus