Chapter 12: TDS & TCS

SECTION RATES LIMITS/ CONDITIONS

Sec 192 Slab Rates TDS deducted at the time of payment

Salary

192A 10% Service < 5 yrs, Amount > 50K - TDS

PF Accumulated NO PAN - MMR Applicable.
Balance Service> 5 yrs - NO TDS

194I P&M - 2% NO TDS If Aggregate Rent is upto Rs.

Rent BUILDING - 10% 2,40,000
Rent kaun deta hai?- Main TDS is applicable on Non- refundable Deposits

194 C Ind/HUF - 1% NO TDS if:

C- Contractor Others - 2% • Single Payment is upto Rs. 30,000

• Aggregate amt. during F. Y. is upto 1lac

• Contract is for Personal Purpose of

Ind/HUF

194 J - JANHIT Operation of • NO TDS if

Professional Fees Call Centre - 2% < 30,000

Fees for Non
FTS Royalty
Others - 10% compete
professional
FTS services Fees

Being a Professional Others The Limit of 30,000 is for each

service 2% payment
10%

ROYALTY • Commission/sitting Fees Paid to

sale, Distribution Others

Non-Executive/Independent Directors.
of films 10% ↳ No Threshold limit
2%

• No TDS on personal payments by

Ind/HUF for FPS

194H- Hafta. 5% NO TDS if Amt is upto Rs. 15000.

Commission/Brokrage 5 takka NO TDS on Underwriting Commission
or brokrage on Public issue

12.1
194M- Man Se 5% KAUN KAATEGA - Individual/HUF

Payment of not covered in 194C, 194J, 194H

• Contract KISKA KATEGA - Any Resident Person

• Professional fees
LIMIT- Agg. Amt.> Rs. 50 lakh
• Commission/Brokrage
paid. in the P.Y.

Sec 194G- Gamble 5% NO TDS if Amt is upto Rs. 15000.

Lottery sale If Lottery seller wins lottery on unsold
Commission tickets, it will be taxable@30%

194D 5% NO TDS if Amt is upto Rs. 15000.

Insurance Commission

194B- Lottery, Puzzles • NO TDS if Amt is upto RS. 10,000

Badi lottery • Deducted at the time of payment only
30%
194BB - Horse Race • If winning is in kind, the payer shall

Bhag Bhag release winnings only after ensuring

that TDS is paid to Govt

194E → Payment to NR 20% Sportsperson & Entertainer

Sportsman, Association, shall be NR+ Non-Citizen
+ cess 4%
ENTERTAINER (eff. 20.8%) Refer Sec 115 BBA
in NR chapter.

Sec 195 Rate in Force → TDS only applicable if amt. recd. by

Payment made to NR or foreign Co. is taxable in India.

(given in finance
NR or Foreign co. at every year) → If Rates given in DTAA are lower,
then those Rates will apply.

194 10% Deducted at the time of payment only

TDS on Kaun kaatega- Payment made by
Dividend Domestic Company
Kiska Katega -
Any Resident Person Cash any other Mode
No limit
No TDS upto Rs.
5000

12.2
 193 10% No TDS:
Interest on Securities Int payable on CG or SG Securities
Int paid to LIC, GIC

194A- Alag wala Interest 10% LIMIT for Int paid by:
Interest other than -Banks/co-op bank/ Post off. - Rs. 40,000
Int. on securities -Others 5000
50,000 for senior citizens

194DA 5% On Income Component

Maturity Proceeds (After 1.9.19) (Maturity less premium paid)
of LIP
NO TDS if:-
DA- DAULAT
• If amount less than Rs. 1,00,000
• If Sum is Recd. on death of Insured.

• If Maturity exempt u/s 10(10D)

194IA 1% of Sale Price • No TDS on Rural Agri land

Sale of Immovable or SDV • Consideration or SDV < 50L → NO TDS

Property w.e. is higher ↳ TDS on 50 lacs or more

• Consideration includes maintainance fees,

parking fees & all other similar charges

194IB 5% • NO TDS IF RENT per month is upto

TDS on Rent NO PAN - 20% Rs. 50,000
of Immovable
• Deducted at the time of payment/
Property
credit of rent of last month w.e. earlier

• Deduction not to exceed Rent for

Last month

194 IC - Indira Colony.

10% IF CONSIDERATION IN KIND → NO TDS

Consideration for
agreement as per Sec
45(5A)

Joint development
Agreement

12.3
 194 LA 10% of Amount upto Rs. 2,50, 000 → NO TDS
Compulsory Sale Price Rural or Urban Agri land-NO TDS
Acq of Immovable
Property

194K 10% NO TDS if payment is

TDS on Income KAUN KAATEGA - UTI/MF

upto Rs. 5000 in a P.Y.
KISKA KATEGA- Resident person
in respect of units.

194LB 5% KAUN KAATEGA - Inf. Debt Fund

TDs on Interest KISKA KATEGA - NR/FC.
on Infrastructure
Debt fund

194N- Nahi Denge When limit is 1 cr: → TDS only applicable on excess

Rate- 2% amount over and above limit.

TDS on Cash
withdrawls in Eg- withdrawal 1.20 cr
When limit is 20 lacs:.
excess of Rs. I crore 20 lakhs to 1 crores- 2% TDS applicable on 0.20 Cr only.
Above 1 crores-5%
Limit will be checked separately for
different banks

→ If assessee has not filed ROI for all 3

preceding P. Ys for which Due Date u/s
139(1) is expired, Limit will be Rs. 20
lakhs

1940 1% NO TDS if all the following conditions

TDS on payment KAUN KAATEGA-E-Commerce

are satisfied:

by E-commerce operator
KISKA KATEGA - E-Commerce i) E- comm. participants Ind/HUF
Operator participant (resident person)
ii) Gross amount of Sale/Services
during P.Y. is upto Rs. 5 lakh
206 AA -
If No PAN- 5% iii) PAN or aadhaar furnished.

12.4
 194P TDS rate- Slab Rate → Section only applicable if
Senior citizen has ONLY:.
Pairi Pauna
Payer-Specified Bank
TDS by Bank in
Payee- Individual
case of Senior Citizen Pension Interest in any
Resident aged
Income Account in which
75 yrs or more
he receives pension

→ That Alc should be with

the same Bank only.

Rate- 0.1% → Only applicable on excess amount over

194Q
NO PAN- 5% 50 lakhs, not whole amount.
Purchase of Goods
of more than Rs. 50 → TDS under this section not
Kaun Kaatega:.
lakhs during P.Y. applicable if:.
Any Buyer whose
last year
TDS already TCS already
T/O> Rs. 10 crore
deducted collected
under any u/s 206C(1H)
Kiska Katega:
other section
Seller
eg. 1940

Notes:
→ Where both 194Q & 206C (1H) applies, TDS has to be deducted u/s 194Q

→ Where TDS u/s 194Q & TCS u/s 206(1)/(1F)/(1G) applies, TCS has to be collected
under above sections.

→ TDS u/s 194Q,194O, 206C(1H) not applicable on securities transactions through RSE.
→ TDS u/s 194Q not applicable on GST/VAT/Excise component. But It will be applicable on whole
amount of any Advance payment.

→ If Buyer is NR- 194Q not applicable But it will be applicable if

If Seller is NR - 206C(1H) not applicable NR has PE in India

→ For 1st Year of Business, TDS u/s 194Q not applicable since last year T/O is zero.

→ If Whole Income of Seller is Exempt- 194Q not applicable

If Whole Income of Buyer is Exempt - 206C(1H) not applicable

→ For Sec 194Q, Dept. of CG/SG can become buyer, but they can not be seller

12.5
Sec 194R Rate- 10% Payer - HIJACR Assessee
Added by F.A. 22 Payee- Any Resident Person
w.e.f. 1/7/22
NO TDS If:

Any Benifit or Amt of benifit/perq provided to a person

TDS is not
Perquisite, whether is upto Rs. 20,000 in a P.Y.
applicable before
converted into 1/7/22 but
If Gift is in kind, payer has to ensure that
money or not, amount is counted
for limit of 20,000 TDS has been deducted & paid to the
arising from Business
govt. in respect of such benefit.
or Profession

Notes: CBDT Guidelines for Sec 194R

Situation Whether TDS is deductible or not?

1) Do PayER needs to check if Gift/ NO. Payer has to deduct tax without
benefit is taxable under PGBP in hands checking taxability in PayEE's hands
of PayEE?

2) Should Gift/benefit be always in kind NO. It Can be:

for TDS u/s 194R? In Kind
In Cash
Partly in kind partly in Cash

3) If Gift is Capital Asset, is 194R YES. 194R is applicable on Capital Assets.

applicable? Eg. Car, Land etc.

3a) Is Sec 194R applicable on Loan NO. Not applicable on 1 time settlement
waiver/settlement by Bank? with the bank/FI.
Note : It doesn't affect its taxability in
hands of PayEE

12.6
4) Is 194R applicable on Sales NO.
Discount, Cash Discount or Rebates? Eg: Even if Seller gives 2 items free on
buying 10 items, its not appliacble.

But, 194R will be applicable in

following cases:

• When Incentive is given in Cash or kind like

Car, TV, Computer, Mobile etc.

• Free Trip

• Free Tickets for Events

• Free Medicine sample to Doctors

Note:
TDS is always deducted from recipient no
matter who uses the gift/benefit.

TDS is not deductible if recipient is Govt.

Entity like Govt. Hospital not doing B or P.

5) How is Value of Gift/Benefit → If Payer has purchased it : Purchase Price

Determined? → If Payer Manufactures. : The Normal Price
it Charges from Others

Note: GST not included for valuation of

benefit/perq. for Sec 194R

6) Is 194R applicable When Social If Influencer returns product: NO

Media Influencer is given Products? If Influencer Retains product: YES

7) If Benefit is partly in Kind Partly in • Ask payEE to pay advance tax &
Cash, How to Ensure deduction & Payment give declaration
of Tax? • Pay himself

12.7
 8)Whether Embassy/High Commission reqd. NO
to Deduct TDS u/s 194R?

9) Is 194R applicable on Bonus Shares & Bonus Shares: NO

Right Shares? Right Shares: NO, if issued by Co. in
which public are substantially interested

10) TDS on Reimbursement of Eg: Consultant Mr. Yash providing service to SRK
Expenses/Out of Pocket Expenses? For Providing Service, Yash has to Travel & stay
in Hotel → for which Expenses are incurred.

Now, It Depends on Invoice

If Hotel's Invoice is in Yash's If Hotel's Invoice is in SRK's Name

Name & paid by SRK & paid/reimbursed by SRK

TDS u/s 194 will be TDS u/s 194 will not be

applicable applicable

If hotel's Expenses are included in total invoice for

consultancy by Yash & TDS u/s 194C/194J is deducted on
whole amount by SRK or Yash acts as pure Agent, then
TDS u/s 194R not deductible

11) Is TDS u/s 194R applicable on Depends

Dealer's Conference to educate Dealers
about the products of the Company?
NO YES
Note:
→ Leisure trip will attract TDS even if If Conference is for: If It is:
incidental to business • New product launch • Leisure Trip
→ One Day before & One day after is not • Obtaining Orders • Along with
considered as Overstay.
• Teaching Sales Family members
→ If benefit is provided in group activity & it is • Addressing Queries • Overstay
difficult to allocate the expense to each person, • Hisab/kitaab
then Assessee has option to not claim the expense
from Business Income.

12.8
 To whom HIJACR are applicable?

HIJACR (1) Assessee other than Individual/HUF

(2) Ind/HUF whose last year T/O> 1 cr in case of Business

G/R > 50 lacs in case of profession.

Master Chart for Remembering all limits

→ NO TDS if amount is upto →TDS is applicable starting

↳ No TDS If Amounts < Threshold limit from this Amount

Which means TDS is only applicable if Sec 194IA → TDS applicable if

Amount paid is more than the Amt is 50 lakhs or more
threshold Limit
→ NO TDS till Rs. 49,99,999

All Other sections Sec 194DA → TDS applicable if

Amt is 1,00,000 or more

→ No TDS till Rs. 99,999

Sec 192A → TDS applicable if

Amt is Rs. 50,000 or more

→ No TDs till Rs. 49,999.

Sec 239A Summary

1) File Application to AO for Refund

2) Time Limit: 30 Days from payment

3) AO

Accept Or Reject
4) Order to be passed: 6 months from the end of month in which
application was received.

12.9
 Sec 206AB/ 206CCA: TDS/TCS Rate for Non- Filers (F. A 2022)

In case of TDS/TCS, if has not of last Year, for which due date has expired
payee/Collectee Filed Returns (P.Y. 20-21)

& TDS/TCS deducted/Collected is 50,000 or more, then TDS/TCS Rate shall be:

- Twice the TDS/TCS Rate

w.e.is higher
- or 5%

→ This section is not applicable on 192, 192A, 194B, 194BB,194LBC,194N,

194N, 194IA, 194IB, 194M
&
NR payee not having PE in India

→ In case payee/collectee did not furnish PAN: Rate as per Sec 206AA/206CC
or
5%
w.e. is higher.

Refund For Denying Liability to Deduct Tax u/s 195 [SECTION 239A]

(i) Application for refund of tax - Where the tax deductible on any income, other
than interest, under section 195 is to be borne by the Payer, and such person
having paid such tax to the credit of the Central Government, claims that no tax
was required to be deducted on such income, he may file an application before the
Assessing Officer for refund of such tax in prescribed form and manner

(ii) Time limit for filing application - Such application may be filed within
30 days from the date of payment of such tax.

(iii) Passing of order by Assessing Officer - The Assessing Officer has to, by an
order in writing, allow or reject the application. However, no application would
be rejected unless an OOBH has been given to the applicant. The A.O., may, before
passing an order make such inquiry as he considers necessary

(iv) Time limit for passing order - The order has to be passed within 6 months
from the end of the month in which application for refund is received.

12.10
TAX COLLECTED AT SOURCE

TCS RATES

Sec 206C(1)

(a) Alcoholic liquor for human consumption 1%

(b) Tendu leaves 5%
(c) Timber obtained under a forest lease 2.5%
(d) Timber obtained by any mode other than (c) 2.5%
(e) Any other forest produce not being timber or tendu leaves. 2.5%
(f) Scrap 1%
(g) Minerals, being coal or lignite or iron ore 1%

Note : No TCS shall be collected if Resident Buyer gives declaration that above goods
are to be utilised for the purpose of → manufacturing, processing or producing
articles or things or for generation of power and not for trading purposes,
But Still Buyer have to deduct TDS u/s 194Q if conditions apply.

Sec 206C(1C) : Lease or a licence of parking lot, toll plaza or mine or a quarry

TCS Rate - 2%.

TCS shall be collected by every person who grants a lease or a licence or enters into a
contract or otherwise transfers any right or interest in any -
- parking lot or
- toll plaza or
- a mine or a quarry
to another person (other than a public sector company) for the use of such parking
lot or toll plaza or mine or quarry for the purposes of business.
Note – Mining and quarrying excludes mining and quarrying of mineral oil i.e. mining
and quarrying of petroleum and natural gas.

Sec 206C(1F): Sale of motor vehicle of value exceeding 10 lakhs

TCS shall be collected by seller, on sale of a motor vehicle of the value > Rs. 10
lakhs, from the buyer @1% of the sale consideration.

Note: TCS under this section is not applicable when Manufacturer sells cars to the
dealers. Only applicable on Retail Sale

→ Limit of Rs. 10 Lacs has to be checked at each purchase, not on aggregate sale
made during the P.Y. If individual sale is less than
10 lacs, Applicability of 206C(1H)
12.11 has to be checked.
 Sec 206C(1G)
TCS on Remittance outside India
OR Sale of Tour Package.

In case of authorized dealer,

In case of Sale of an
who receives an amount
Overseas tour program package,
of more than 7 lacs in p y.
if seller receives any amount, Seller
from a buyer → who is
is required to collect TCS @5%.
remitting amount outside
India under LRS of RBI,
the Auth. dealer is required to
collect TCS @ 5% in excess of Rs. 7 Lacs.

Note: If remitted amount is remitted out

of educational loan taken from Financial
Institution, TCS Rate shall be @ 0.5%

Note: But TCS u/s 206C(1G) is not applicable to a Non-Resident who has
visited India during the P.Y.

Sec 206C(1H)

Sale of goods of value exceeding 50 lakh

Sells goods exceeding

Seller Buyer
value 50 Lacs in a P.Y.

Having T/0 > 10Cr

in Last P.Y. TCS shall be collected @ 0.1% at the time of receipt

of amount in excess of 50 Lacs

→ TCS is not required to be collected under this section if already collected u/s
206C(1)/(1F)/(1G) or if Goods are exported.
→ Where both 194Q & 206C (1H) applies, TDS has to be deducted u/s 194Q

→ TCS u/s 206C(1H) shall be calculated on whole amount including GST.

→ If Collectee did not provide PAN, TCS shall be collected @ 1%

→ In case of Sale of Fuel to NR Airlines, TCS u/s 206C(1H) not applicable

12.12
 Additional Points
Due Date of Payment of TDS/TCS

TDS TCS

For Other Months 7th of Next month 7th of Next month

For March 30th April of Next F.Y. 7th April of Next F.Y.

For Sec 194M,194IA, 194IB:

→ TAN not required as TDS under these sections are deducted ocassionally

Due Date of Return : 194 IA - Form 26QB

& Payment 194 IB - Form 26QC 30 Days from the end of
194 M - Form 26QD month in which deducted
194S - Form 26QE

Due Date of Return of TDS/TCS

Quarter Ended TCS Return TDS

30th June 15th July 31st July

30th September 15th October 31st October
31st December 15th January 31st January
31st March 15th May 31st May

Late Fees: Rs. 200 per day of delay in filing of TDS/TCS Returns

If TDS/TCS Return is filed after 1 year of Due Date → Penalty u/s 271H shall be
leviable - 10,000 to max 1,00,000.

12.13
 Interest for Late Deduction/Collection of TDS/TCS

TDS TCS

Late Deduction/Collection 1% per month 1% per month

or part or part

Period Date on which TDS was Date on which TCS was

deductible to date on collectible to date on
which it is deducted which it is actually paid

Late Payment 1.5 % per month -

or part

Period Date on which TDS was

deducted to date on -

which it is actually paid

Time of Collecting TCS

(a) at the time of debiting the party or But for Sec 206C(1F) & 1(H),
(b) receipt of consideration TCS is collected only at the time of
w.e. is earlier receipt of consideration.

Section 206CC
If Collectee has not provided PAN or Aadhar, TCS Rate shall be:

Twice the TCS Rate

OR In case of Sec 206C(1H), It is 1%
5%

w.e. is higher

Sec 201: Assessee in Default

If TDS is not deducted then, Assessee is treated as assessee in
OR deducted but not paid to Govt. default.
Penalty u/s 221 is attracted → which can be upto 100% of TDS Amount

12.14
Payer is not treated as Assessee in Default if :

filed return u/s 139(1)

taken into account such

paid tax on such income PayEE Has
income

And Payer has furnished a certificate from his CA

in this regard to AO

12.15