TDS Rate Chart - Plan Your Investments Wisely

Tax Deducted at Source or TDS applies to resident Indians, non-resident Indians, domestic companies, and international companies that operate in India. The TDS percentage can vary between 1% and 30%, based on your income source. In some rare cases, it may even touch 50%.

Some of you may have noticed that your accountant at work deducts more TDS than required, meaning that you have to claim an income tax rebate when filing your returns. The onus of deducting tax falls on the payer, and it must be levied while making the payment. Additionally, they must deposit the tax within the given deadline.

Scope of TDS

TDS is applicable not only on your income but also on your investments and any earnings made on your fixed assets. Hence, you must be aware of TDS rates and applicability while planning your investments. Tax is deductible at source, even on big-ticket purchases like buying 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?

Let’s discuss the applicable TDS rates as people get ready to file their taxes for the previous fiscal year. We will look at TDS rate charts across the following 4 areas: resident and non-resident Indians, domestic companies and international companies.

TDS for Both Resident and Non-Resident Indians

Section	Description	TDS rate for resident Indian	TDS rate for non resident Indian
192	Salary	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 an Investment fund that pays income to you Note: Income earned under section 10 (23 FBB) won’t 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 specific to each category of individuals.

TDS Specific to Resident Indians

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%

TDS 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 look at TDS rate charts for organisations, 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.

TDS Rates for an International Company Operating in India

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 a 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%
	Fees received for rendering technical services	10% to 50%

Reduction in TDS due to COVID-19

The government has provided relief on TDS rates, effective from 14/05/2020 to 31/03/2021, due to the adverse effects of COVID-19 on businesses. This relief is limited to the TDS and not for taxes collected/deducted at a higher rate. Moreover, this revision of tax amount is limited to resident Indians only.

Conclusion

Check the respective TDS rates and claim any applicable TDS refunds to minimise your tax outgo. Furthermore, you can invest in tax-saving instruments like term insurance. You can consider the Bajaj Allianz Smart Protect Goal Term Insurance policy available on Bajaj 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 ₹1 crore at affordable premiums starting at just ₹13 a day, riders that offer coverage for up to 55 critical illnesses and rapid claim settlement, the term insurance plan on Bajaj Markets is comprehensive. Enjoy dual benefits of tax savings and financial protection with our term insurance plan.