TDS (Tax Deducted at Source) was introduced to collect taxes at the point of income generation. As per this concept, a person (the deductor) who is liable to make certain payments to another person (the deductee) must deduct tax at the source and remit it to the government. The deductee from whose income tax has been deducted at source is entitled to receive a credit for the amount so deducted if the deductor issues Form 26AS or TDS certificate.
TDS is calculated and levied based on a specified limit. This limit is the maximum level of income at which TDS will be taken from your future earnings. TDS is deducted according to the Indian Income Tax Act, 1961.
TDS is deducted in many ways, including from salary income and Bank FD earnings, interest income from the Post Office, insurance commissions, rent payments, early EPF withdrawals, the sale of immovable property, and rent payments on real estate, etc.
For example:
You invested Rs. 10,00,000 in a life insurance policy for a year at 8% interest. After a year, you earn an interest of Rs. 80,000.
- It is now the responsibility of the life insurance company to deduct TDS on this Rs. 80,000 interest and deposit it with the Income Tax Department and issue you a TDS certificate reflecting this transaction.
- If your income (including the interest on this life insurer policy of Rs. 80,000) is less than Rs. 2,50,000, you can claim the TDS deducted by the insurer and get a refund.
- In the case, where your tax slab is 30%, then you will have to pay the remaining 20% tax (30%-10% TDS already deducted) on such interest income of Rs.80,000. Therefore, you must pay the tax of Rs.16,000 (Rs.24,000 total tax + Rs.8,000 TDS).
Let us know run through the latest TDS rates chart for Financial Year 2021-22 and Assessment Year 2022-23.
TDS Rates Chart for FY 2021-22 (AY 2022-23)
Below are the latest TDS rate table applicable for the Financial Year 2021-22 based on the Budget 2021 amendments;
Particulars | Specified Limit | TDS Rate % | |
---|---|---|---|
Section 192 |
Payment of Salary |
Income Tax Slab |
Normal Slab rates (Based on old or new tax regimes) |
Section 192A |
Employees are entitled to receive taxable payments from the accumulated balance of their provident funds. |
Rs 50,000 |
10% If no Pan, TDS @ 30% |
Section 193 |
Interest on Securities A debenture or a security for money issued by or on behalf of any local authority or corporation established by a Central, State or Provincial Act; |
Rs. 10,000 |
10% |
Section 193 |
Interest on Debentures In the case of listed debentures issued by a company on a recognized stock exchange as per the Securities Contracts (Regulation) Act, 1956 (42 of 1956), including any rules made thereunder; |
Rs 5,000 |
10% |
Section 194 |
Dividend Income |
Rs 5,000 |
10% (No TDS on Div Payouts by REITs / InvITs) |
Section 194A |
Interest income other than "Interest on securities" |
Rs. 40,000 |
10% |
Section 194B |
Winnings from lotteries, card games, crossword puzzles, and other games of any sort |
Rs. 10,000 |
30% |
Section 194BB |
Winnings from horse race |
Rs. 10,000 |
30% |
Section 194C |
Payment to contractor/sub-contractor a) HUF/Individuals b) Others |
|
a) 1% b) 2% |
Section 194D |
Payment of Insurance Commission (Form 15G/H can be submitted) |
Rs. 15,000 |
5% (Individuals) 10% (Companies) |
Section 194DA |
Life insurance policy related payment |
Rs 1,00,000 |
5% |
Section 194EE |
Payment of NSS (National Savings scheme) Deposits |
Rs 2,500 |
10% |
Section 194F |
The payment on account of the repurchase of the unit by a mutual fund or unit trust |
- |
20% |
Section 194G |
Commission, etc., on sale of lottery tickets |
Rs 15,000 |
5% |
Section 194H |
Commission or brokerage |
Rs 15,000 |
5% |
Section 194-I |
Rent of land, building, fitting or furniture |
Rs. 2,40,000 |
10% |
Section 194-I |
Rent of Plant & Machinery |
Rs. 2,40,000 |
2% |
Section 194-IA |
Payments on the transfer of certain immovable property other than agricultural land |
Rs. 50 lakh |
1% |
Section 194-IB |
Payment of Rent (Tenant has to deduct TDS) |
Rs 50,000 (per month) |
5% |
Section 194-IC |
Payment of monetary consideration under Joint Development Agreements |
- |
10% |
Section 194J |
Fees for professional or technical services: i) Amount paid or payable towards fees for technical services ii) Amount paid or payable towards royalty like consideration for sale, distribution, or exhibition of cinematographic films; iii) Any other sum |
Rs 30,000 |
i) 2% ii) 2% iii) 10% |
Section 194K |
Income in respect of units payable to resident person |
- |
10% |
Section 194LA |
Payment of compensation on acquisition of certain immovable property |
Rs 2,50,000 |
10% |
Section 194LB |
Interest from Infrastructure Bond to NRI |
NA |
5% |
Section 194LBA(1) |
Business trust shall deduct tax while distributing, any interest received or receivable by it from a SPV or any income received from renting or leasing or letting out any real estate asset owned directly by it, to its unit holders. |
- |
10% |
Section 194LBB |
Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)] |
- |
10% |
Section 194LBC |
Income in respect of investment made in a securitization trust (specified in Explanation of Section 115TCA) |
|
25% (for Individual or HUF) 30% (for others) |
Section 194 LD |
Interest on certain bonds and govt. Securities |
NA |
5% |
Cash withdrawal during the previous year from one or more account maintained by a person with a banking company, co-operative society engaged in business of banking or a post office: |
More than Rs 1 crore |
2% |
|
Section 194-O |
Payment or credit of amount by the e-commerce operator to e-commerce participant |
- |
1% |
Section 194P |
Deduction of tax by specified bank in case of senior citizen having age of 75 or more |
- |
Tax on total income as per rate in force |
Section 194Q |
Payment to resident for purchase of goods of the aggregate value exceeding Rs. 50 lakhs (applicable w.e.f 01.07.2021) |
Rs 50 lakh |
0.1% |
Section 194Q |
Any other Income |
- |
10% |
Section 206AB |
TDS on non-filers of ITR at higher rates (applicable w.e.f 01.07.2021) |
- |
5% or Twice the rates in force |
Note: The rate of TDS shall be increased by applicable surcharge and Health & Education cess. Please consult a tax consultant for more details.
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