A very brief description of the various categories of payments (other than salaries) which are subject to TDS and the relevant Sections are being given below, while detailed discussion on the issues of TDS and TCS are included in the subsequent chapters.
Section 193 – TDS from Interest on Securities. The exempted securities are listed in the relevant Section. Deduction is to be done as per rates in force.
Section 194 – TDS from Dividend. Certain exemptions exist as are provided for in the Section where the aggregate of Dividend during the Financial year does not exceed Rs. 2500/-. Deduction is to be made as per the rate in force.
Section 194A – TDS from Interest other than interest on Securities. TDS is to be done on Interest exceeding Rs. 5000/- w.e.f. 01.06.2007, in respect to deposit with a banking company or a co-operative society carrying on banking business, TDS is to be made if the interest exceeds Rs. 10,000/-.
Section 194B – TDS from winnings from lotteries or Crossword puzzles or card game & other game of any sort. TDS to be done on payment of an amount exceeding Rs. 10000/- (w.e.f. 1/7/2010) TDS is deductible on prize in kind also. In cases, where the winnings are wholly in kind or where they are partly in cash and partly in kind but the part in cash is not sufficient to meet the liability for tax deduction in respect of the whole of the winnings, the person responsible for paying shall, before releasing the winnings either in cash or in kind, ensure the tax has been paid in respect of the winnings.
Section 194BB – Winnings from horse races exceeding Rs. 5000/- (Increased w.e.f. 01/07/2010)
Section 194C- Payments to contractors and Sub Contractors. For payments to contractors, the rate of tds is one percent in case of Advertising and two percent in other cases. The provisions is not applicable in case of payment made by individuals and HUF if the gross receipts or turnover from the business or profession does not exceed the monetary limits specified u/s 44AB clause (a) or (b).
Section 194D – Insurance Commission. TDS on payment of more than Rs 20,000/-
Section 194EE – Payment in respect of NSS. TDS to be done on payment which is above Rs. 2500 @ 20%
Section 194F – Payments for repurchasing units of Mutual Fund/UTI @ 20%
Section 194G – Commission etc. on sale of lottery tickets exceeding Rs 1000 @ 10%
Section 194H – Commission, Brokerage etc. above Rs. 2500/- deduction @ 10% when payments are made by Individual / HUF, if their business. Exemption limit raised to Rs. 5000 (w.e.f. 01/07/2010) turnover does not exceed the limits specified in 44AB. If the payment made for personal use no deduction.
Section 194I – Rental Income TDS to be done on payment exceeding Rs 1,80,000. The rate of TDS is to be 2% where plant or machinery is rented out, 10% in case of land or building.
Section 194J – Payment to resident of fees for professional or technical services exceeding Rs 30000 (w.e.f. 01/07/2010) deductions at the rate of 10%. Not applicable, if payer is individual or HUF and if the business turnover does not exceed the limits mentioned in Section 44AB.
Section 194K – TDS by Mutual Fund/UTI – Income exceeding Rs. 2500 in respect of units of mutual funds specified under section 10 (23D) or of UTI. Qualifying income includes income credited/paid. Rates of TDS is 10%. No deduction is to be made for any such income credited/paid after 01.04.2003.
Section 194LA – Payment to resident, compensation / consideration on account of compulsory/ acquisition under any law of any immovable property (deduction of tax is to be done @ 10%) (Other than agricultural land) No deduction if payment is less than Rs. 1 Lac during the financial year.