TDS & Tax Provisions for F.Y.

2018-19
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Sandeep rawat
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TDS stands for tax deducted at source. As per the Income Tax Act, any company or
person making a payment is required to deduct tax at source if the payment
exceeds certain threshold limits. TDS has to be deducted at the rates prescribed by
the tax department.

The company or person that makes the payment after deducting TDS is called a
deductor and the company or person receiving the payment is called the deductee. It
is the deductor’s responsibility to deduct TDS before making the payment and deposit
the same with the government. TDS is deducted irrespective of the mode of
payment–cash, cheque or credit–and is linked to the PAN of the deductor and
deductee.

TDS is deducted on the following types of payments:

Salaries
Interest payable by assessee
Rent payments
Consultation fees
Professional fees

The assesse is mandatorily required to deduct tax at source (“TDS”) in applicable

cases on various payments (by way of salaries, payment to vendors, rent, etc.) and
deposit the same with the Government, within the stipulated time. A short deduction
of TDS or non-deduction results in the Assessee being treated as an ‘assessee-in-
default’ and consequently, the Assessee is liable for payment of interest on TDS,
penalty, etc. Also, such payments are disallowed as a deduction under the Income-tax
Act, 1961 where there is a default in deduction and/or deposit of TDS.

Finance Act, 2018 has brought some minor changes in the TDS provisions. For
your ready reference, TDS rate chart for FY 2018-19 is provided below:

TDS rate chart for FY 2018-19

1. Commonly used TDS Provision for payments made to persons resident in India
(Individuals, Firms, Companies, etc.):-

Section Nature of Payment for Domestic Threshold Individual / Others 15G-

Transactions Limit HUF 15H

Rs. TDS Rate (%) Allowed

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 192 Salaries (Annexure-I) – As per – NO
income tax
slabs

193 Interest on Securities 10000 10 10 YES

194A Interest to other than Resident 10000 10 10 YES

Senior Citizen

194A Interest to Resident Senior Citizen 50000 10 10 YES

194C Contractor – Single Transaction 30000 1 2 NO

194C Contractor – Aggregated 100000 1 2 NO

Transaction during the F.Y.

194H Commission / Brokerage 15000 5 5 NO

194I Rent of Land and Building – F&F 180000 10 10 YES

194I Rent of Plant / Machinery / 180000 2 2 YES

Equipment

194IA Transfer of certain immovable 5000000 1 1 NO

property other than agriculture
land

194J Professional Fees / Technical Fees 30000 10 10 NO

/ etc.

194J Payment to Call Centre Operator 30000 2 2 NO

(w.e.f. 01.06.2017)

Conditions for being a resident senior citizen:

Individual of 60 years or more at any time during the year

An individual is said to be resident in any previous year if he satisfies any one of
the following conditions:
He stays in India in the relevant previous year for a period of 182 days or,
He stays in India for at least 60 days during the relevant previous year and at
least 365 days for 4 years preceding that previous year.
Other TDS Provision for payments made to persons resident in India
(Individuals, Firms, Companies, etc.)

Section Nature of Payment for Domestic Threshold Individual Others 15G-

Transactions Limit / HUF 15H

Rs. TDS Rate Allowed

(%)

192A Premature withdrawal from EPF 5000 10 – YES

194 Dividends 2500 10 10 YES

194B Winning from Lotteries 10000 30 30 NO

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194BB Winning from Horse Races 10000 30 30 NO

194D Insurance Commission 15000 5 10 YES

194DA Life insurance Policy 100000 1 1 YES

194E Non-Resident Sportsmen or Sports 20 20 NO

Association

194EE NSS 2500 10 10 YES

194F Repurchase Units by MFs 20 20 NO

194G Commission – Lottery 15000 5 5 NO

194IB Rent by Individual / HUF (w.e.f. 50000/PM 5 – NO

01.06.2017)

194LA Compensation on transfer of certain 250000 10 10 NO

immovable property other than
agricultural land

194LA Immovable Property (TDS exempted – – – NO

under RFCTLARR Act (w.e.f.
01.04.2017)

194LB Income by way of interest from – 5 5 NO

infrastructure debt fund (non-
resident)

194LC Income by way of interest by an – 5 5 NO

Indian specified company to a non-
resident / foreign company on
foreign currency approved loan /
long-term infrastructure bonds from
outside India (applicable from July 1,
2012)

194LD Interest on certain bonds and Govt. – 5 5 NO

Securities (from 01-06-2013)

Notes:

a) No TDS on Goods & Service Tax: As per circular no. 23/2017 dated 19.07.2017 of
CBEC, TDS is not applicable on Goods and Service Tax (GST) where GST is shown
separately.

b) No Surcharge, Health & Education Cess is not deductible on payments made to

residents, other than salary

c) Deduction of TDS at a lower rate or non-deduction of TDS:

i) Deduction of TDS at a lower rate:

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In case where a certificate for deduction of TDS at a lower rate u/s. 197 is obtained
from the customer/ vendor, it should be confirmed whether the amount of payment
is within the limit and valid for the period specified in the certificate u/s. 197 along
with the certificate no. using the ‘197 Validation’ facility on the TRACES website.

ii) Non-deduction of TDS:

Please note that Form No. 15G can be accepted by the Assessee only when the total
interest amount payable is less than the minimum exemption limit, which is Rs.
2,50,000 for financial year 2018-19. In case the same exceeds the above limit, then
TDS is to be deducted as per the applicable provisions.

In case of Form No. 15H, the same is not acceptable if the total taxable income of the
customer/ vendor including the interest income after claiming deductions under
chapter VI(A) exceeds the minimum exemption limit, which is Rs. 3,00,000 for senior
citizen/ Rs. 5,00,000 for super senior citizen for financial year 2018-19.

d) TDS at higher rate: If a person fails to furnish PAN to the Assessee whose receipts
are subject to TDS, then, the TDS is to be deducted at higher of the following rates”

i) The rates in force or

ii) 20%

Exemption for deduction of TDS at a lower rate or non-deduction of TDS as discussed

in Point 1-C is not admissible in case of Invalid PAN/ No-PAN.

e) TDS on Good Transport: TDS shall be applicable on payment to transporters, i.e.,

contractors in the business of plying, hiring or leasing goods carriages. However, TDS
exemption will be available to transporter owning 10 (ten) or less goods carriage at
any time during the previous year. For claiming such exemption, transporter would
also need to furnish a declaration to the Assessee along with a copy of PAN. For
transporter not covered above, TDS is to be deducted at normal rates as given in
above table.

f) TDS on interest u/s 194A paid to resident senior citizen: Finance Act, 2018 has
increased the threshold limit u/s section 194A of the Income Tax Act, 1961 for
“resident” Senior Citizens to Rs. 50,000/-.

2) Due dates for deposit/remittance of TDS to Central

Government
Other than Section 194IA/194IB

For the months of April to February (Monthly) – on or before 7th day from the
end of the month in which tax is deducted.
For the month of March – 30th April

Section 194IA/194IB

For any month – on or before 30th day from the end of the month in which tax
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 is deducted.

3) Interest on non-deduction/ non-payment of TDS or delay in

payment of TDS
As per Sec. 201(1A) of the Income-tax Act, 1961, if the Assessee does not deduct the
whole or any part of the TDS or after deducting fails to pay the TDS as required by or
under the Act, then the Assessee is liable to pay simple interest on the amount of
such TDS, for every month or part of a month, at the rate of:

1% from the date on which such TDS was deductible up to the date on which
such TDS is deducted; and
1.5% from the date on which such TDS was deducted up to the date on which
such TDS is paid

4) Feed for Late filing of TDS Return

As per Sec 234E of Income tax Act 1961, where a person fails to deliver or cause to be
delivered a statement within the time prescribed in sub-section (3) of section 200 or
the proviso to sub-section (3) of section 206C, he shall be liable to pay, by way of fee, a
sum of two hundred rupees for every day during which the failure continues,
maximum to the amount of tax deducted.

5) Due dates for filing of e-TDS returns & issue of TDS

certificates
a) In respect of any other TDS (other than TDS u/s. 194-IA):

Quarter Period Due Date for filing of Due Date for issuing TDS
e-TDS Return certificate [in Form no. 16A]

Q-1 1st April to 30th 31st July 15th August

June

Q-2 1st July to 30th 31st October 15th November

September

Q-3 1st October to 31st 31st January 15th February

December

Q-4 1st January to 31st 31st May 15th June

March

b) In respect of TDS u/s 194IA

i) A challan-cum-statement in Form No.26QB is to be filed within 30 days from the end

of the month in which the deduction is made

ii) TDS certificate in Form no.16B is to be issued to the payee within 15 days from due
date of furnishing statement in Form no. 26QB

c) In respect of TDS u/s 194IB

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i) A challan-cum-statement in Form No.26QC is to be filed within 30 days from the end
of the month in which the deduction is made

ii) TDS certificate in Form no.16C is to be issued to the payee within 15 days from due
date of furnishing statement in Form no. 26QC

Annexure-I

TAX SLABS FOR FY 2018-19 AY 2019-20

1. Income Tax Slab for Individual Tax Payers & HUF (Less Than 60 Years Old)

Income Tax Slab Tax Rate

Income up to Rs 2,50,000 No tax

Income from Rs 2,50,000 – Rs 5%

5,00,000

Income from Rs 5,00,000– 10,00,000 20%

Income more than Rs 10,00,000 30%

Surcharge: 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1
crore.

Surcharge: 15% of income tax, where the total income exceeds Rs.1 crore.

Health & Education Cess: 4% of Income Tax.

2. Income Tax Slab for Senior Citizens (60 Years Old or More but Less than 80 Years
Old)

Income Tax Slab Tax Rate

Income up to Rs 3,00,000 No tax

Income from Rs 3,00,000 – Rs 5%

5,00,000

Income from Rs 5,00,000– 10,00,000 20%

Income more than Rs 10,00,000 30%

Surcharge: 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1
crore.

Surcharge: 15% of income tax, where the total income exceeds Rs.1 crore.

Health & Education Cess: 4% of Income Tax.

3. Income Tax Slab for Senior Citizens (80 Years Old or More)

Income Tax Slab Tax Rate

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Income up to Rs 5,00,000 No tax

Income from Rs 5,00,000– 20%

10,00,000

Income more than Rs 10,00,000 30%

Surcharge: 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1
crore.

Surcharge: 15% of income tax, where the total income exceeds Rs.1 crore.

Health & Education Cess: 4% of Income Tax.

The writer can be reached at sandeeprawatca@gmail.com

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