Tax Deducted at Source (TDS) Applicability as Per the Finance Act, 2020

Any person who makes specified payments mentioned under the provision of the Income Tax Act, 1961, then he is required to deduct TDS at the time of such payment. But if such payment is made by an individual or HUF whose books of account are liable for audit, then no TDS is required to be deducted.

However, as per section 194IB, an individual or HUF whose books are not liable for audit and he makes rent payments of more than 50000 per month, then such individual or HUF is required to deduct TDS.

Most Important TDS Rate for F.Y 2023-24 with Limits

Where person other than company and resident of india:

Section	Nature of Payment	TDS Rate
Sec-192	Payment of salary	Normal slab rates
Sec-192A	Payment of PF	10%
Sec-193	Payment of interest on securities	10%
Sec-194	Payment of dividend	10%
Sec-194A	Interest income  from deposit with banks	10%
Sec-194A	Interest income from friends and relative	10%
Sec-194B	Income from gambling activities	30%
Sec-194BA	Income from online games	30%
Sec-194BB	Income from horse races winning	30%
Sec-194C	Payment to contractor / Sub-contractor	Individual/HUF – 1%   Other – 2%
Sec-194D	Insurance commission	5%
Sec-194DA	Payment in respect of  a life insurance policy	5%
Sec-194EE	Payment in respect of deposit under National Saving Scheme	10%
Sec-194F	Payment for the repurchase of the unit by Unit Trust of India of a Mutual Fund	20%
Sec-194G	Payment of commission on sale of lottery tickets.	5%
Sec-194H	Payment of commision or brokerage	5%
Sec-194I	Rent 194I(a) Rent on plant & machinery. 194I(b) Rent on land or building or furniture or fitting.	194I(a) 2%     194I(b) 10%
Sec-194IA	Payment on transfer of certain immovable property other than agricultural land	1%
Sec-194IB	Payment of rent by individual or HUF not liable to tax audit ( not covered u/s 194I	5%
Sect-194IC	Payment of monetary consideration under Joint Development Agreements	10%
Sec-194J	Fees for professional or technical services:        i.            sum paid or payable towards fees for technical services.     ii.            sum paid or payable towards royalty in the nature of consideration for sale, distribution or exhibition of cinematographic films;   iii.            Any other sum	2%   2%       10%
Sec-194K	Income in respect of units payable to resident person	10%
Sec-194LA	Payment of compensation on acquisition of certain immovable property	10%
Sec-194O	Payment or credit of amount by the e-commerce operator to e-commerce participant.	1%   5% in case pan is not furnished
Sec-194Q	Payments for purchase or goods	.10%

 

Download TDS Rate Chart for F.Y 2023-24 in Pdf  –      DOWNLOAD

Different Types of Forms

Forms	Particulars
Form 24Q	Quarterly statement for “TDS on Salary”
Form 26Q	Quarterly statement for “TDS in respect of all payments except Salaries”
Form 26QB	Challan cum statement for “TDS on sale of property”
Form 26QC	Challan cum statement for “TDS on rent”
Form 27Q	Quarterly statement for “TDS in respect of payment made to NRI”

 

Due Date For Depositing TDS

As per section 200 of the Income Tax Act of 1961, the deductor deducts TDS and deposits to the government within the specified time limit (i.e., by the 7th day of the next month). The due date for Jan to March quarter is different for the government and other deductors. For the government, the due date is the 7th of April and for others 30th of April.

Quarter	For Government Deductor	For Other Deductor
April – Feb	By 7th day of the next month	By 7th day of the next month
March Month	By 7th April	By 30th April

 

Due Dates of TDS Return For F.Y 2023-24 (Form 24Q, Form 26Q & 27Q)

Quarter	Quarter Period	Quarter Ending	Due Date
1st Quarter	April-June	30th June	31st July 2023
2nd Quarter	July-September	30th September	31st Oct 2023
3rd Quarter	October- December	31st December	31st Jan 2024
4th Quarter	January-March	31st March	31st May 2024

 

Due Dates of TDS Return For F.Y 2023-24 (Form 26QB & Form 26QC)

Form 26QB- It is a challan cum statement that is filed within 30 days from the end of the month in which TDS is deducted.

Form 26QC- It is a challan cum statement that is filed within 30 days from the end of the month in which TDS is deducted.

 

Different Type of TDS Certificate

Form	Certificate	Frequency	Due Date
Form 16	TDS on salary payment	Yearly	31st may
Form 16A	TDS on non-salary payment	Quarterly	15 days from the due date of filing return
Form 16B	TDS on sale of property	Every  Transaction	15 days from the due date of filing return
Form 16C	TDS on rent	Every  Transaction	15 days from due the date of filing return

 

Late Filing Fees and Penalty on TDS Return

As per section 234E of the Income Tax Act of 1961, If a person fails to file TDS/TCS return on or before the due date, then such person is liable to pay late filing fees of 200 per day till the date on which TDS return filed, but late filing fees cannot exceed TDS amount.

Note- The late filing fees has to be deposited before filing the TDS return.

Note- A sum of 200 per day is not a penalty, it is late filing fees.

Example: Mr. A deducted a TDS of Rs 5000 in June 2023 and deposited it to the government on 3 July 2023, but he filed a TDS return on 25 Jan 2024. What is the late filing fees to be paid by him?

Solution: Due date for filing TDS return = 31st July 2023

                    No. of days delay = 178

Month	Days
Aug	31
Sep	30
Oct	31
Nov	30
Dec	31
Jan	25
Total	178

                Late fees per day = 200

                Total Late Fees    = 35,600

In the above case, the Total calculated late fee is Rs 35,600. As per section 234E, the late fee amount can not exceed the TDS amount, so in this case, a maximum late fee will be Rs 5000 (Up to the TDS amount)

As per section 271H of the Income Tax Act of 1961, If a person fails to file TDS/TCS return or files an incorrect TDS/TCS return within the due date, the assessing officer may direct such person to pay a minimum of 10,000 which can go up to 100,000.

The department has given relaxation in case of late filing of TDS/TCS returns if the following conditions are satisfied.

• Deducted TDS/TCS has been paid to the government.
• Late filing fees and interest (if any) have been paid to the government.
• TDS/TCS return has been filed before the expiry of one year from the due date of filing the TDS/TCS return.

Note- Penalty u/s 271H is in addition to late filing fees mentioned Under section 234E.

 

Interest payment on failure to deduct or pay TDS

As per section 201(1A) of the Income Tax Act of 1961, if a person fails to deduct TDS at the time of making specified payments then such person is liable to pay interest at a rate of 1% for a month or part of a month.

If a person has deducted TDS but not deposited to the government then such person has to pay interest at a rate of 1.5% for a month or part of a month.

Example: Mr. A has taken loan from Mr. B of 100,000 on 01/04/2023 at an interest rate of 10% per month. Mr. A has not deducted TDS in June month and made an interest payment of Rs 10,000 to Mr B on 21/06/2023 but he realized and deducted TDS of 1000 (100,000 x 10% x 10%) on 15 July 2023 and deposited to the government on 03/08/2023. What is the interest amount u/s 201(1A) to be paid by Mr A?

Solution: The date on which TDS was to be deducted = 21/06/2023

                     The date on which TDS has been deducted = 15/07/2023 

                    Interest amount for late deduction = Rs 20 (1000 x 1% x 2 months)

Example: In the above example, assumed Mr. A has deposited the TDS amount on 18/08/2023. What is the interest amount for a late deposit?

Solution: Date on which TDS was to be deposited = Till 07/08/2023

                     The date on which TDS has been deposited = 18/08/2023

                     Interest amount for late deposit = Rs 30 (1000 x 1.5% x 2 months)

 

Frequently Asked Question

Q-1 Can the deductee request the deductor to not deduct TDS?

Ans.- A deductee can request the deductor to not TDS but for this deductee has to furnish form 15G/form 15H in which he has to mention that his estimated total income of the previous year will be nil.

Q-2 what will happen if the deductor fails to deduct TDS or after deducting fails to deposit to the government’s account?

Ans.- As per section 201 (1A) of the Income Tax Act 1961, if the deductor fails to deduct TDS or after deducting fails to deposit TDS to the government then he has to pay simple interest:-

• 1% per month or part of a month for late deduction;
• 1.5% per month or part of a month for late deposits.

Q-3 What are the duties of a deductor?

Ans.- Following are the basic duties of the deductor:

1. He has to obtain Tax Deduction Account Number and quote in all TDS-related documents;
2. He has to deduct TDS at the applicable rate while making the specified payment;
3. He has to deposit tax deducted by him to the government within the due date;
4. He has to file the TDS return within the due date;
5. He has to issue a TDS certificate to the deductee.

Q-4 What is the reason for not reflecting TDS credit in form 26AS?

Ans.- There are several reasons for not reflecting TDS credit in form 26AS like non-filing of TDS return or quoting incorrect PAN of the deductee by deductor. Therefore, in case of non-reflection of TDS credit in form26AS, the deductee has to inform the deductor about such non-reflection of TDS and ascertain the correct reason.