Revised Limit of TDS w.e.f. 01-06-2016
Hemant Mehta
Finance Act 2016 has revised TDS Rates and limit for Rationalization of tax deduction at Source (TDS)
Under the scheme of deduction of tax at source as provided in the Act, every person responsible for payment of any specified sum to any person is required to deduct tax at source at the prescribed rate and deposit it with the Central Government within specified time. However, no deduction is required to be made if the payments do not exceed prescribed threshold limit.
In order to rationalise the rates and base for TDS provisions, the threshold limit for deduction of tax at source and the rates of deduction of tax at source have been revised with effect from 1-6-2016 as mentioned in Table 1 and Table 2 respectively.Certain non-operational provisions to be omitted w.e.f 01.06.2016 as mentioned in Table 3
Table 1: Increase in threshold limit of deduction of tax at source on various payments mentioned in the relevant sections of the Act
Section | Heads | Pre-amended threshold limit (prior to 1-6-2016) (Rs.) | Amended threshold limit (on or after 1-6-2016) (Rs.) |
192A | Payment of accumulated balance due to an employee | 30,000 | 50,000 |
194BB | Winnings from Horse Race | 5,000 | 10,000 |
194C | Payments to Contractors | Aggregate annual | Aggregate |
194LA | Payment of Compensation on acquisition of certain | 2,00,000 | 2,50,000 |
194D | Insurance commission | 20,000 | 15,000 |
194G | Commission on sale of lottery tickets | 1,000 | 15,000 |
194H | Commission or brokerage | 5,000 | 15,000 |
Table-2 : Revision in rates of deduction of tax at source on various payments mentioned in the relevant sections of the Act:
Present Section | Heads | Pre-amended rate of TDS (%) (prior to 01.06.2016) | Amended rate of TDS (%) (on or after 01.06.2016) |
194DA | Payment in respect of Life Insurance Policy | 2% | 1% |
194EE | Payments in respect of NSS Deposits | 20% | 10% |
194D | Insurance commission | Rate in force | 5% (Note-1) |
194G | Commission on sale of lottery tickets | 10% | 5% |
194H | Commission or brokerage | 10% | 5% |
Table -3 :Certain non-operational provisions to be omitted 01.06.2016
Present Section | Heads | As per Finance Act 2016 |
194K | Income in respect of Units | To be omitted w.e.f |
194L | 194L Payment of Compensation on acquisition of Capital Asset | To be omitted w.e.f |
1. The amendment is effected in Entry 1(a)(iv) of Part II of First Schedule specifying the rate of deduction of tax at source in case of a person other than a company on income by way of commission.
Revised due date as per Rule-31A, Income-tax Rules to file TDS Statement in Form No 24Q, 27Q, and 26Q w.e.f 01.06.2016 as per notification no. 30/2016.
Sr.No. | Date of ending of quarter of financial year | Due Date |
(1) | (2) | (3) |
1. | 30th June | 31st July of the financial year |
2. | 30th September | 31st October of the financial year |
3. | 31st December | 31st January of the financial year |
4. | 31st March | 31st May of the financial year immediately following the financial year in which the deduction is made |
Earlier Time Limit as per Rule-31A, Income-tax Rules to file TDS Statement in Form No 24Q, 27Q, and 26Q
i) the due date specified in the corresponding entry in column (3) of the said Table, if the deductor is an office of Government; and
ii) the due date specified in the corresponding entry in column (4) of the said Table, if the deductor is a person other than the person referred to in clause (i)
Sr. No. | Date of ending of the quarter of the financial year | Due date | Due date |
1. | 30th June | 31st July of the financial year | 15th July of the financial year |
2. | 30th September | 31st October of the financial year | 15th October of the financial year |
3. | 31st December | 31st January of the financial year | 15th January of the financial year |
4. | 31st March | 15th May of the financial year immediately following the financial year in which deduction is made | 15th May of the financial year immediately following the financial year in which deduction is made. |
CA Hemant Mehta, Bcom., FCA, DISA, MBF(ICAI).
Partner.
For H. J. Mehta & Associates,
Chartered Accountant
Visit us at : www.cahjmehta.com
Vidya Bhavan School,Ghatkopar (E), Mumbai-400077.
Contact No.- 2506 8665, Telfax- 2506 8664
Notice: The information contained in this e-mail message and/or attachments to it may contain confidential or privileged information. If you are not the intended recipient, any dissemination, use, review, distribution, printing or copying of the information contained in this e-mail message and/or attachments to it are strictly prohibited. If you have received this communication in error, please notify us by reply e-mail or telephone and immediately and permanently delete the message and any attachments. Thank you