Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) Direct Tax Provisions

Flashcards testing knowledge of Tax Deducted at Source (TDS), Tax Collected at Source (TCS), non-deduction thresholds, rates, non-filer rules, and penalty interest under Indian Direct Tax provisions.

What is the rate and threshold for Tax Deducted at Source under Section 192 (Salary)?

TDS is deducted at the time of payment as per Normal Rates (Slab/Special as applicable). No TDS is deducted if Salary / Total Income is $\le$ Basic Exemption Limit.

How are reported losses treated when computing Total Income for TDS under Section 192?

Total Income covers all reported incomes including loss under the head "House Property". If the employee reports any other losses, they must be IGNORED for TDS computation.

What is the rate of TDS and the threshold limit for withdrawal from Recognised Provident Fund [RPF] under Section 192A?

The rate of TDS is $10\%$ at the time of withdrawal. No TDS is deducted if withdrawal is $< \text{₹ } 50,000$ in a year or if withdrawal from RPF itself is Exempt.

What is the TDS rate under Section 193 for Interest on Securities, and what is its basic threshold limit?

The rate is $10\%$ at the time of payment or credit (whichever is earlier). No TDS is deducted if the interest payment to a Resident Person is $\le \text{₹ } 10,000$ in a year.

How do Section 194 and Section 194K differ regarding payment type and threshold conditions?

Section 194 applies to dividend on shares paid by a Domestic Company, while Section 194K applies to dividend on Mutual Funds. Under Section 194, the $\text{₹ } 10,000$ threshold applies ONLY if the payee is an Individual and payment is done through OTHER than CASH (no such restriction in Section 194K).

Under Section 194A, when is an Individual or HUF payer required to deduct TDS on interest other than interest on securities?

An Individual or HUF payer must deduct TDS under Section 194A ONLY if their Turnover / Gross Receipts in the preceding previous year exceeded $\text{₹ } 1\text{ Crore}$ in case of Business, or exceeded $\text{₹ } 50\text{ Lakhs}$ in case of Professions.

What are the increased limits under Section 194A for interest paid by Banks on deposits to Resident Senior Citizens versus Other Payees?

The non-deduction threshold is increased to $\text{₹ } 1,00,000$ for Resident Senior Citizen payees and $\text{₹ } 50,00,000$ is not the limit—it is $\text{₹ } 50,000$ for Other Payees.

What is the TDS rate and threshold limit for winnings from online games under Section 194BA?

The rate is $30\%$ on Net Winnings at the end of the Financial Year (or upon withdrawal during the year). There is No Threshold limit.

What are the rate and threshold limits for TDS on horse race winnings (Section 194BB) and all other winnings (Section 194B)?

Both sections require TDS at $30\%$ at the time of payment. No TDS is deducted if the winning is $\le \text{₹ } 10,000$ on a single transaction.

What are the rates of TDS under Section 194C for payments made to contractors or sub-contractors?

The rate is $1\%$ if the payee is an Individual / HUF, and $2\%$ if the payee is Any Other Person.

What is the threshold limit for non-deduction of TDS on contract charges under Section 194C?

No TDS is deducted if a single payment is $\le \text{₹ } 30,000$ AND aggregate payment is $\le \text{₹ } 1,00,000$ in a year.

What are the TDS rates and non-deduction thresholds for Insurance Commission (Section 194D) and Life Insurance Policy proceeds (Section 194DA)?

Under Section 194D, rate is $2\%$ ($10\%$ for Domestic Company payee) with threshold $\le \text{₹ } 20,000$/year. Under Section 194DA, rate is $2\%$ of income comprised therein with threshold sum received $< \text{₹ } 1,00,000$/year (or exempt u/s 10(10D)).

What are the TDS rates and thresholds under Section 194G (Lottery Ticket Commission) and Section 194H (Other Commission)?

Both sections prescribe a $2\%$ TDS rate at payment/credit (whichever is earlier) and no TDS if commission is $\le \text{₹ } 20,000$.

What are the TDS rates under Section 194I for rent payments?

The rate is $2\%$ if the asset is Plant & Machinery, and $10\%$ if the asset is Any Other Asset (Land / Building / Furniture). No TDS applies if Rent is $\le \text{₹ } 50,000$ per month.

What is the rate and threshold for TDS under Section 194-IA on purchase of Immovable Property?

The rate is $1\%$ of Agreement Value or Stamp Duty Value (whichever is higher). No TDS applies if Agreement Value AND Stamp Duty Value are $< \text{₹ } 50,00,000$.

What is the TDS rate and threshold under Section 194-IB for rent paid by Individuals/HUF not covered under Section 194I?

The rate is $2\%$ at the time of payment/credit of last month's rent. No TDS applies if Rent is $\le \text{₹ } 50,000$ per month.

What single non-deduction threshold applies under Section 194J across professional fees, technical services, and royalties?

The threshold is $\le \text{₹ } 50,000$. (Director payments under Section 194J have No Threshold).

What are the rate and threshold for Section 194M payments made by Individuals/HUF not covered under 194C, 194J, or 194H?

The rate is $2\%$ at payment/credit (whichever is earlier), with no TDS if payment is $\le \text{₹ } 50,00,000$ in a year.

For which specific TDS sections is the requirement of having a TAN NOT applicable?

The requirement of having TAN is NOT applicable for Section 194-IA, Section 194-IB, and Section 194M.

How does Section 194N cash withdrawal TDS apply if the assessee has NOT filed Income Tax Returns for all 3 preceding previous years?

TDS is applicable above $\text{₹ } 20\text{ Lakhs}$: $2\%$ from $\text{₹ } 20\text{ Lakhs}$ to $\le \text{₹ } 1\text{ Crore}$, and $5\%$ for amounts $> \text{₹ } 1\text{ Crore}$.

What is the rate and threshold for TDS under Section 194LA for compulsory acquisition compensation?

The rate is $10\%$ at the time of payment. No TDS applies if Compensation is $\le \text{₹ } 5,00,000$ in a year or if compensation is for compulsory acquisition of agricultural land.

Who is a Specified Senior Citizen under Section 194P and what benefit do they receive?

A Resident Senior Citizen aged $\ge 75\text{ Years}$ having ONLY Pension Income AND Interest Income in the same Specified Bank. Once the bank deducts TDS under Section 194P, the Specified Senior Citizen is Exempted from filing an Income Tax Return.

What are the conditions, rate, and threshold for TDS on purchase of goods under Section 194Q?

Applicable to buyers with P.P.Y. Turnover $> \text{₹ } 10\text{ Crores}$. Rate is $0.1\%$ of sum exceeding $\text{₹ } 50\text{ Lakhs}$ (at payment/credit whichever is earlier), provided TCS is not applicable and purchase payments exceed $\text{₹ } 50\text{ Lakhs}$.

What is the rate and threshold for TDS on business/profession benefits or perquisites under Section 194R?

The rate is $10\%$ of the value of benefit (before providing such benefit). No TDS applies if Aggregate Value of benefit is $\le \text{₹ } 20,000$ in a year.

What is the TDS rate and threshold under Section 194T for salary and interest payments made by a firm to its partners?

The rate is $10\%$ at payment/credit (whichever is earlier). No TDS applies if such payments are $\le \text{₹ } 20,000$ in a year.

What are the TCS rates under Section 206C(1) for specified goods sold for resale?

Alcoholic Liquor / Scrap / Minerals (Coal, Lignite, Iron Ore) at $1\%$; Timber / Any other Forest Produce at $2\%$; Tendu Leaves at $5\%$.

What are the TCS rates under Section 206C(1G) for foreign remittances towards overseas tour packages versus education/medical purposes?

Overseas Tour Programme Package: $5\%$ till $\text{₹ } 10\text{ Lakhs}$, $20\%$ thereafter. Medical/Education: No TCS up to $\text{₹ } 10\text{ Lakhs}$, $5\%$ thereafter (No TCS at all if from Bank Education Loan).

What higher tax rates apply under Section 206AA (TDS) and Section 206CC (TCS) if PAN is not furnished by the payee/collectee?

Under Section 206AA (TDS): Higher of Actual Rate or $20\%$ (Max $5\%$ for 194Q; Max Last Month's Rent for 194-IB). Under Section 206CC (TCS): Higher of Twice Actual Rate or $5\%$.

What are the interest rates for delay in TDS/TCS deduction versus delay in TDS/TCS deposit?

For delay in deduction: $1\%$ per month or part thereof from Date Deductible to Date Deducted. For delay in deposit: $1.5\%$ per month or part thereof from Date Deducted to Date Deposited.