#Learn Taxation: Types of Tax Deducted at Source

TDS(Tax Deducted At Source) is the tax deducted by deductor before paying any amount to deductee. It is a kind of Advance Tax where the amount of tax is paid periodically as mentioned in the Act.

TDS involves two parties: one who deducts tax called Deductor. A person or company who pays amount to other will have to deduct tax if it exceeds the mentioned amount. Other person or company who accept the deducted amount is Deductee.

The liability of payment of tax lies with Deductor. There are several types of payment in which TDS is to be deducted. This must be paid irrespective of mode of payment(cash, cheque or bank transfer). PAN no. of deductor is to be furnished in return of TDS. TDS return is to be filled quarterly in a year.

TYPES OF TDS PAYMENTS:-

Sections of TDSThreshold limitRate in %
192(Salary)As per applicable slabAs per applicable slab
193(Interest on securities)Rs.5000 in respect of debenture payment10% of security investment in respect of debenture.
194( Dividend income)Rs.250010% of proceeds of deemed dividend
194A(Interest other than interest on securities)Rs.5000
Rs.10000 in case where payer is :
(a)Banking company or any bank or a banking institution
(b)Co-operative society engaged in the business of banking
(c)Post office (on deposit under scheme framed and notified by Central Government)
Rs.50000 for senior citizen for:
a) Deposit with Banks

b) Deposit with Post Offices

c) Fixed Deposits Schemes

d) Recurring Deposit Schemes.
10% where PAN is furnished
20% where no PAN is furnished
194B( winning from lottery or any other game)Rs.1000030%
194BB(payment for arranging horse race or betting)Rs.1000030%
194C(payment to contractor or sub-contractor)Rs.30000 per contractor.
Rs.100000 per annum
Individual/HUF-1%
Non-individual/Corporate-2%
194D(payment as insurance commission)Rs.1500010% of earning as insurance commission.
194EE(Payment in respect of deposit under National Saving Scheme)Rs.250020% of expense in NSS deposits
194F(payment for repurchase of mutual funds or UTI units)Nil20% of investment in MF or UTI units
194G(commission from lottery ticket selling)Rs.150010% of commission in lottery ticket selling
194H(payment of commission or brokerage)Rs.1500010% of brokerage earning
194I(payment of rent)Nil2% for rent to plant and machinery
10% for rent to land and building
194J(payment for professional services)Rs.30000 per annum10%
194L(payment of compensation for acquisition of capital asset)Rs.10000010% of transfer money paid for purchase of Immovable property