Specified Payments on Which TDS is to be Deducted

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In previous article, we have discussed about persons responsible to deduct TDS. In this article we will discuss about on which payment they have to deduct TDS. Not every payment is liable to deduct TDS. The income tax act specified some payment on which the deductor is responsible to deduct TDS and deposit the same on behalf of the deductee.

Persons deducting taxes from specified payments, remit them to government account and persons from whose income-tax was deducted, get credit for the same in their assessments.

  1. Salary [Sec 192]
  2. Accumulated balance in Recognised Provident Fund. Account of any employee which is not exempt under rule 8 of Fourth Schedule – Part-A being Rs. 50,000 or more] Sec. 192A [Inserted vide Finance Bill, 2015 w.e.f 1.6.2015]
  3. Interest on Securities [Sec. 193]
  4. Interest on 8% Saving (Taxable) Bonds, 2003 credited or paid during a finance year to a resident exceeding Rs. 10,000/- [Sec 193]
  5. Interest on Gold Bonds (in case of a resident individual, TDS is to be deducted if the value of Bonds held during the relevant period exceeds Rs.10,000) [Sec. 193]
  6. Interest on listed debentures of a public company (in case of a resident individual or HUF, TDS is to be deducted where total interest exceeds Rs. 5,000 p.a. or where interest is paid otherwise than by an account payee cheque [Sec. 193]
  7. Interest other than interest on securities except interest on deposits in notified schemes exceeding Rs. 5,000 p.a. [Sec. 194A]
  8. Interest on time deposits (excluding recurring deposits) with a banking company or a co-operative bank where the interest exceeds Rs. 10,000 p.a.(Rs. 50,000 in case of payee being a senior citizen, w.e.f. 1-4-2018) (It has been clarified by vide CBDT Circular NO. 8/2011 dt.14.10.2011 that in the case of deposits in banks made by a litigant under directions of a court, in the names of Registrar and Senior Master attached to the court, TDS shall be deducted as per prescribed procedure and at specified rates, and the TDS certificate(s) shall be issued in the name of the depositor litigant as per their respective share.) [Sec. 194A]
  9. Interest on deposits under notified scheme with post office, exceeding Rs. 10,000 p.a. .(Rs. 50,000 in case of payee being a senior citizen, w.e.f. 1-4-2018) [Sec. 194A]
  10. Interest on compensation awarded by the Motor Accidents Claim Tribunal, where such interest exceed Rs.50,000 p.a.[Sec. 194A]
  11. Interest in relation to zero coupon bonds issued before 1.6.2005 by an infrastructure capital company [Sec. 194A]
  12. Winning from lotteries and crossword puzzles or card game and other game of any sort exceeding Rs. 10,000 [194B]
  13. Winning from horse races exceeding Rs. 10,000/- [Sec 194BB]
  14. Payments to contractor or sub contractors [Sec 194C]
  15. Commission to insurance agents exceeding Rs.15,000/- [Sec 194D]
  16. Payments to non-resident foreigner sportsmen and non-resident sports associations u/s 115BBA [Sec 194E]
  17. Payments of any amount standing to the credit of the assessee in an account under the National Savings Scheme, 1987 being Rs.2500 or more during a financial year. [sec 194EE]
  18. Payment on repurchase of units issued under ELSS. [Sec 194F]
  19. Commission, remuneration or prize on lottery tickets exceeding Rs. 15000
  20. Commission other than insurance commission or brokerage credited or paid exceeding Rs.15000 in a financial year excluding commission or brokerage payable by BSNL or MTNL to their PCO franchisees.
  21. Payment of rent during a financial year exceeds Rs.180000/-
  22. Fees for professional services exceeding Rs.30000 p.a.
  23. Any remuneration, fees, commission, etc.
  24. Royalty exceeding Rs. 30000 p.a.
  25. Consideration received on account of compulsory acquisition under any law of any immovable property other than agricultural land exceeding Rs. 2,50,000/- (Rs.100000 up to 30.06.2012) in a financial year, to a resident.

 

 

Categories TDS
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5 thoughts on “Specified Payments on Which TDS is to be Deducted

  1. IN FINANCIAL YEAR 2014-15, IF WE ARE PAYING RENT OF A BUILDING 15,500.00 PER MONTH, THUS TOTAL IN A YEAR 186000.00. NOW PLEASE LET ME KNOW WHETHER WE HAVE TO DEDUCT TDS @10% ON 6000.00( PAYMENT IN EXCESS OF 180000) OR WE HAVE TO DEDUCT TDS ON WHOLE AMOUNT OF 186000.00. THANKS IN ADVANCE.

    • Hello Sharwan Kumar Maurya… It is very simple to know. Just login your account to Income Tax Department efiling website and find an option of 26AS. 26AS will contain all the TDS deducted by all employers or payers during the year. Thanks

  2. I am an Insurance Surveyor & Loss Assessor. In certain types of losses (marine cargo survey losses), the Insurance Co. instruct us to carry out the survey and collect the survey fees from the policy holder. We accordingly raise our bill in favour of the policy holder who take our survey report by paying our survey fees which is reimbursed to them by the Insurance Co. on production of our survey report and bill. In many cases, the policy holders (companies) deduct TDS from our survey fees. My question is that whether such policy holders (companies) can deduct TDS because they are just temporarily making the payment to us on behalf of the Insurance Co. which is reimbursed to them later by the Insurance Co. If they are liable, then what amount would be reimbursed as TDS may not have been deposited by the time they receive the reimbursement and TDS Cft. also not issued.

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