TDS Rates - TDS Rate Chart for FY 2020-21 & TDS Percentage

02 Apr 2020

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Tax Deducted at Source or TDS is applicable to resident as well as non-resident Indians as well as to both domestic companies as well as international companies that operate in India. The TDS percentage can vary between 10% and 30%. In some rare cases it may even touch 50%.

Some of you may have noticed that your accountant at work on occasion deducts more TDS than required, meaning that you have to claim an income tax rebate when filing your returns. Your accountant was playing it safe. It is the responsibility of the person making payments to deduct tax when making the payment. The tax must additionally be deposited within the given deadline.

TDS is not only applicable on your income but also on your investments and on any earnings made on your fixed assets among other things.

As a result, you need to be aware of TDS rates and applicability while planning your investments.

Moreover, choose your investments wisely based on TDS rates applicable. On the Finserv MARKETS platform, a range of investment options are available at your fingertips - browse on the go keeping TDS in mind and choose what is best suited to you.

Tax is deductible at source even on big ticket purchases like when you buy a new home. The scope of TDS is a lot wider than many people would assume. For example did you know you have to pay tax on online poker game earnings?

Moreover TDS percentage or the TDS deduction rate depending on factors such as your residency status.

Today we will discuss the TDS rates applicable as people get ready to file their taxes for the previous fiscal. We will look at TDS rate charts across the following 4 areas resident and non resident Indians, domestic companies and non domestic companies.

To begin with let's look at TDS for individuals that is for both resident and non resident Indians:

Section	Description	TDS rate for resident Indian	TDS rate for non resident Indian
192	Salary payment	Depends on the income tax slab	Depends on the income tax slab
194B	Income earned from card games, lotteries and/or any other games	30%	30%
194BB	Income earned through winnings from horse racing	30%	30%
194EE	Deposits in National Saving Scheme	10%	10%
194F	Payment made for repurchase of units by Unit Trust of India or Mutual Funds	20%	20%
194G	Commission/ other income earned on lottery ticket sales	5%	5%
194LBB	Income earned from Investment fund that pays income to you There is an exception here - income earned under section 10 (23 FBB) will not be taxed	10%	30%
194LBC	Income earned from securitisation trust (as per section 115TCA)	25%	30%

In addition Resident Indians and NRIs have a bunch of other taxes to be paid. We have drawn up a list that includes some of the TDS that are specific to each category of individuals.

Let's look at TDS specific to resident Indians first:

Section	Description	TDS rate
193	Interest on securities	10%
194	Dividend other than dividend as specified in section 115-O	10%
194A	Interest earned on securities	10%
194D	Insurance commission	5%
194DA	Payment towards life insurance policy	1%
194H	Commission or brokerage	5%
194I	Rent on plant or machinery	2%
194I	Rent on furniture or fixtures	10%

Similarly here are the TDS areas and rates specific to non resident Indians:

Section	Description	TDS rate
195	Payment of any other sum to a NRI	30%
	Income from investments	20%
	Income from long-term capital gains	10% to 20%
	Income from short term capital gains	15%
	Income by way of interest payable by the Indian government or an Indian company	20%
	Income by way of royalty payable	10%
	Income by way of technical fees payable by government or an Indian company	10%
196C	Income from units linked to an offshore fund	10%
196D	Income from foreign institutional investors in securities	20%

Now let us have a look at TDS rates for organizations, that is, domestic companies and international companies.

TDS rates applicable for a domestic company:

Section	Description	TDS rate
193	Interest on securities	10%
194	Dividend	10%
194A	Interest other than interest on securities	10%
194B	Income by way of any sort of games or lotteries	30%
194BB	Income from horse races	30%
194C	Payments to contractors Individuals Others	1% 2%
194D	Insurance commission	10%
194DA	Life insurance payment	2%
194EE	Deposits in Nation Saving Schemes	10%
194	Payment towards repurchase of units of mutual funds	20%
194G	Commission etc. on sale of lottery tickets	10%
194H	Commission or brokerage	5%
194I	Rent Plant or machinery Land or building, furniture or fitting	2% 10%
194IA	Payment on property (except agricultural) transfer	1%
194J	Payments towards professional services, royalty, fees, remuneration and commission	10%
194LA	Payment as compensation for acquisition of immovable property	10%
194LBA	Income distributed by business trust to unit holder	10%

Any other income earned by a domestic company is subject to 10% TDS.

The TDS rates for an international company:

Section	Description	TDS rate
194B	Income from any sort of games and lotteries	30%
194BB	Income from horse races	30%
194E	Payment to non resident sports association	20%
194G	Commission or other earnings on sale of lottery tickets	5%
194LB	Payment of interest on infrastructure debt fund	5%
194LBA	Certain income distributed by business trust to unit holders	5%
194LC	Payment of interest by an Indian company related to money borrowed in foreign currency under loan agreement or long term bonds	5%
194LD	Payment of interest on rupee denominated bond	5%
195	Interest by way of long term capital gains mentioned in section 112	10%
	Interest by way of long term capital gains mentioned in section 10	20%
	Income by way of short term capital gains mentioned in section 111A	15%
	Income by way of interest payable by the government or an Indian company in foreign currency	20%
	Royalty payable by the government or an Indian company in foreign currency	10% to 50%
	Income by way of fees for technical services	10% to 50%

Conclusion

Be sure to check the respective TDS rates and claim any applicable TDS refunds to minimize your tax outgo. Other steps you can take to save on tax include investing in tax-saving instruments like term insurance. You can consider the Bajaj Allianz Smart Protect Goal Term Insurance policy on Finserv MARKETS, which can help you claim tax deductions on the premiums paid. Additionally, any payouts received under the policy are also exempted from taxation. With high coverage of Rs. 1 crore at affordable premiums starting at just Rs. 13 a day, riders that offer coverage for up to 55 critical illnesses and rapid claim settlement, the term insurance plan on Finserv MARKETS is a comprehensive plan. Enjoy dual benefits of tax-savings and financial protection with the term insurance on Finserv MARKETS.

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