Applicable TDS Rate for FY 2017-18 & 2016-17

Under indirect tax section of Income Tax Act, 1961, TDS is described as spot tax that is deducted from the actual source of income.

The TDS rate applicable under various sections and sub-sections are as follows:

Income Tax Section	Threshold limit	TDS Rate
Section 192	Depends on the prevailing income slab	Depends on the prevailing income slab
Section 193	NIL	On security investments – 10% of the interest earned
Section 194	NIL	Deemed dividends – 10% of the income/profit
Section 194A	Rs. 5,000	Interest on investments other than securities – 10% of the income
Section 194B	Rs. 10,000	On lottery or gaming – 30% of the prize money
Section 194BB	Rs. 5,000	Horse Racing – 30% of the prize money
Section 194C	Rs. 30,000	Income from contracts / sub contracts – At the rate of 1% for individuals and HUF At the rate of 2% Non-Individual/corporate
Section 194D	Rs. 20,000	Insurance commissions – 10% of the earning
Section 194EE33	Rs. 2,500	NSS deposits – 20% of the expense
Section 194F	NIL	MF or UTI units – 20% of the investment
Section 194G	Rs. 1,000	Lottery ticket selling commission – 10% of the commission
Section 194H	Rs. 5,000	brokerage – 10% of the earning
Section 194I	Rs.1.8 lakhs	Rental – At the rate of 2% for plant & machinery At the rate of 10% for land & building
Section 194J	NIL	Professional – 10% on the services (technical/professional)
Section 194L	Rs.1 lakh	Acquiring immovable property – At the rate of 10 % of the transferred money.

TDS Deduction and its Rates

The TDS rate on various heads are as follows:

Salary – TDS is deducted by the employer from the employee’s salary while making the payment. It is deducted only if the employee’s income falls under the tax slab. The rate of deduction TDS on salary normally ranges from 5% to 30%. It falls under section 192.

Income from Fixed Deposits – The TDS on interest earned on fixed deposit is calculated and applied as follows:

• It is calculated beyond a threshold limit
• Currently, in a financial year, the applicable limit is Rs. 1 lakh
• TDS at the rate of 10% will be applicable if the individual earns more than the threshold limit, both single or consolidated interest for all fixed deposits.

Income from Selling Immovable Property – The applicable TDS rate on sale of immovable property are as follows:

• TDS is applicable at a rate of 1% on the sale of the immovable property
• If the buyer does not furnish his/her PAN card then the TDS rate may range at a maximum limit of 20%
• It is liable that the buyer (transferee) deduct the TDS amount before making the payment to the seller (transferor)
• Property that comes under Immoveable property are – any residential, any portion of a building, commercial building and plots exclusive of notified agricultural land.
• Cheque cash or draft by the transferee are the two modes of transaction

Income from Rental – The applicable tax rate on the revenue generate from the rent of immovable properties are as follows:

• Individual (excluding HUF member) paying rent for accommodation or any immovable property to its landlord then, he/she is accountable for retaining the TDS
• The TDS will be liable if the annual rent amount exceeds Rs. 1,80,000/- in a financial year.
• The rent comprises of any payment made in the form of rental lease, sublease or other such agreement for using the house, building, land, fitting, furniture, etc.
• The owner of the property is liable to provide rent receipt/ receipt on each payment, that mentions the deducted TDS
• The owner should also provide Form 16 to the tenant at the end of the financial year, quoting all the TDS deducted that year
• The transactions are acceptable via cheque cash or draft by the transferee.

Purchase of Immovable Property – If an individual buys an immovable property, he/she is liable of falling under the below-given tax rate:

• TDS at the rate of 1% is applicable, where there is an exchange of money between a buyer and a seller
• So far, TDS on agricultural land is not liable for TDS under this provision
• The mode of payment that the transferee can use are – cash, cheque, draft or any other agreed mode of payment.

Transfer of Immovable Property – If an individual wants to transfer immovable property, the liable TDS rate are as follows:

• A TDS rate of 1% is liable if an individual transfers an immovable property. However, the same is not applicable for transferring agricultural land
• The transferee should deduct the applicable TDS before making the payment
• Cheque cash or draft by the transferee are the applicable modes of payment

Immovable Property for NRIs – The TDS provision for NRIs regarding immovable property are given Under section 195 of Income Tax Act as:

• Any individual who is buying any immovable property from an NRI is liable to deduct TDS at an applicable rate before making the payment to the seller
• An NRI receiving capital gain by selling a plot in India is subjected to income tax.
• Cheque cash or draft by the transferee are the applicable modes of payment

Under-Construction Immovable Property – The worth of any under-construction immovable property is normally calculated as Rs. 50 lakhs. Cheque cash or draft by the transferee are the applicable modes of payment.

EPF withdrawal – If an employee withdraws PF of an amount of Rs 50,000/- and above with less than five years of continuous service then a TDS is deducted at the rate of:

• If PAN is submitted, but Form-15G/15H are not submitted, an individual is liable of TDS at the rate of 10%
• If the individual cannot provide PAN number then, the TDS rate is 34.608% or maximum marginal rate

TDS Rate Chart for Financial Year 2017-18

The applicable TDS rate for the Financial year 2017-18 is given below in the table:

Section	Payment name	TDS Rate (%)
Section 192	Salary	Regular slab rate
Section 193	Earned Interest on Securities	At the rate of 10%
Section 194	Dividend accrued	At the rate of 10% (20%, in case of invalid/no PAN)
Section 194A	Earned Interest other than Securities	At the rate of 10%
Section 194B	Earned income on prize money (lotteries, crosswords, or game)	At the rate of 30%
Section 194D	Paid commission for Insurance Agents	N/A (in case of Form 15G/15H is filled) *
Section 194DA	Paid Premium for any life insurance policy	At the rate of 1%
Section 194-I	Income from Rent	At the rate of 2% for plant and machinery At the rate of 10% for Land, furniture, fitting and furniture
Section 194IA	Payment for transferring immovable property. This does not include Agricultural Land	At the rate of 1%
*effective from 1st June 2017.

The applicable TDS rate for NRIs, for the Financial year 2017-18 is given below in the table:

Section	Payment name	TDS Rate (%)
Section 192	Salary	Normal slab rate
Section 192A	Payment gained from PF balance	At the rate of 10%
Section 194B	Prize money (lotteries, crossword puzzles, card games or any game under Indian Law)	At the rate of 30%
Section 194BB	Prize money from horse racing	At the rate of 30%
Section- 194EE	National Savings scheme Deposits	At the rate of 10%
Section 194F	Mutual Funds’ investments or UTI bonds	At the rate of 20%
Section 194G	Commission from selling lottery tickets	At the rate of 5%

The applicable TDS rate for Salaried personals, for the Financial year 2017-18 is given below in the table:

Section	Payment name	TDS Rate (%)
Section 192	Income up to Rs. 2.5 lakhs	Nil
	Income within Rs. 2.5 lakhs to Rs. 5 lakhs	At the rate of 5%
	Income within Rs. 5 lakhs to Rs. 10 lakhs	At the rate of 20%
	Income above Rs. 10 lakhs	At the rate of 30%

The applicable TDS rate for Salaried personals, for the Financial year 2017-18 is given below in the table:

Section	Payment name	TDS Rate (%)
Section 192	Income up to Rs. 3 lakhs	Nil
	Income within Rs. 3 Lakhs - Rs. 5 Lakhs	At the rate of 5%
	Income within Rs. 5 Lakhs - Rs. 10 Lakhs	At the rate of 20%
	Income above Rs. 10 lakhs	At the rate of 30%

The applicable TDS rate for Super Senior citizen (above 80 years), for the Financial year 2017-18 is given below in the table:

Section	Payment name	TDS Rate (%)
Section 192	Income up to Rs. 5 lakhs	Nil
	Income within Rs. 5 lakhs - Rs. 10 lakhs	At the rate of 20%
	Income above Rs.10 Lakhs	At the rate of 30%

TDS Rate on Salary for Financial Year 2016-17

Section	Payment name	TDS Rate (%) for HUF/Ind	TDS Rate (%) for others
Section 192	Salary	Average rate	-
Section 192A	Total balance due to be paid to an employ is less than Rs. 50,000/-
Session 193	Income from interest on securities which is less than Rs. 10,000/- Income from interest on Debentures which is less than Rs. 5,000/-	At the rate of 10%	At the rate of 10%
Section 194	Income from deemed dividend u/s 2(22)(e)	At the rate of 10%	At the rate of 10%
Section 194A	Interest from sources other than securities – For bank or post office it should be less than Rs. 10,000/- For others, it should be less than Rs. 5,000/-	At the rate of 10%	At the rate of 10%
Section 194B	Income from lottery or crossword which is less than Rs. 10,000/-	At the rate of 30%	At the rate of 30%
Section 194BB	Revenue from Horse Race which is less than Rs. 10,000/-	At the rate of 30%	At the rate of 30%
Session 194C	Income from contracts with an aggregate annual limit which is less than Rs. 1 lakh	At the rate of 1%	At the rate of 2%
Session 194D	Revenue from Insurance Commission which is less than Rs. 15,000/-	At the rate of 5%	At the rate of 5%
Session 194DA	Payment for Life insurance policy	At the rate of 01%
Session 194E	Payment to sportsmen/ sports associations (Non-residents)	At the rate of 20%	At the rate of 20%
Session 194EE	Payment made on NNS deposits	At the rate of 10%
Session 194F	Repurchase of MF/UTI units	At the rate of 20%	At the rate of 20%
Session 194G	Commissions gained on selling lottery tickets – Rs. 15,000/-	At the rate of 5%	At the rate of 5%
Session 194H	Commission gained as Brokerage – Rs. 15,000/-	At the rate of 5%	At the rate of 5%
Session 194I	Income generated from renting machinery, equipment, and plant which is less than Rs. 1,80,000/-	At the rate of 2%	At the rate of 2%
	Income generated from renting land, buildings or appurtenant land including factory buildings, furniture or fitness which is less than Rs. 1,80,000/-	At the rate of 10%	At the rate of 10%
Session 194IA	Transferring immovable property (except agricultural land) which worth less than Rs. 50 Lakhs	At the rate of 1%	At the rate of 1%
Session 194J	Payment to technical or professional charges, royalty and non-compete fees, payment to directors, which is less than Rs. 30,000/-	At the rate of 10%	At the rate of 10%
Session 194LA	Revenue generated as compensation on acquisition of immovable properties which worth less than Rs. 2,50,000/-
Session 194LB	Revenue generated as Infrastructure Bond interest	At the rate of 5%	At the rate of 5%
Session 194LBA	Revenue from special propose vehicle, distributed by the business trust (real estate investment trust) which is paid to its unit holders. (Resident payee/non-resident payee)	The rate is specified in First Schedule Part II – Resident – at the rate of 10% Non-resident – at the rate of 5%	The rate is specified in First Schedule Part II – Resident – at the rate of 10% Non-resident – at the rate of 5%
Session 194LBB	Payment to Unit holders for Funs investment u/s 115UB	At the rate of 10%	At the rate of 10%
Session 194LC	Interest paid by Indian company to Non-residents, or any similar payment	At the rate of 5%	At the rate of 5%
Session 194LD	Interest paid on government bonds or securities payable on or after 1st June 2013 but before 1st June 2017	At the rate of 5%	At the rate of 5%
Session 195/196B/196C/196D/196E	Payment made to non-residents	Rate in force	Rate in force

Penalty on Failing or default in submitting returns or statements

If an individual fail to submit TDS to the government or delayed due to default in submitting the return or statement then he/she will be penalised as follows:

Section	Type of Failure	Penalty
Section 234E	Not submitting TDS/TCS statement in time	A fine of Rs. 200/- will be charged per day on the deductor as long as he/she do not clear the default, subject to a maximum of TDS amount The interest should be paid from the date of TDS deduction and not from TDS deposit due date
Section 272A(2)	Not submitting returns prescribed under Section 200(3)	A penalty ranging between Rs. 10,000/- to Rs. 1,00,00/- will be charged – If the payable TDS return is not submitted within a year of the due date If the submitted return has incorrect details such as PAN, TDS amount, etc
Section 271H	If the deductor – Furnish wrong details (PAN, TDS account, Challan details, etc) Default for more than 1 year in filing TDS statement	A penalty not less than Rs. 10,000/- but may extend to Rs. 1,00,000/-

Conclusion

The TDS which is deducted by the employer/payer on the employee’s income before making the payment is submitted to the government. This deduction is based on the rates set by the government depending on the various income heads of the employee/payee. The rate remains the same until new amendment comes. Therefore, it is advisable to keep a track of the various TDS rates, to file your TDS return under correct heads.