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.
Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no cost EMIs to 4 hours product delivery, we work towards fulfilling all your personal and financial needs. What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.