Before going into the intricacies of a TDS rate chart, you should learn more about TDS itself. TDS stands for tax deducted at source. This is mandatorily deductible and payable from a wide range of incomes and other transactions. Prescribed persons are required to deduct tax (TDS) on specified transactions and pay it to the government within the stipulated time as per TDS Rate Chart as applicable for various categories.
When it comes to Indian residents, they have to abide by TDS rates on a variety of transactions. These are listed in this table along with the applicable rates of TDS for various kinds of transactions that are to be mandatorily made on things like payment of salary, investments, rental income and the like.
TDS Rates Applicable For Salary & Rent as per FY 2018-19
| Category | Rate of TDS |
|---|---|
| Salary | Regular Slab Rate or the Rate of Income Tax applicable to the employee based on the slab he/she falls in. |
| Interest earned on securities | 10% |
| Dividend income | 10% |
| Interest earned (other than securities) In this context, Interest income up to ` 50,000 for senior citizens from post office/bank deposits is not taxable. | 10% |
| Income from lottery/card games and other similar activities | 30% |
| Income from horse races | 30% |
| Payments made to contractor/sub-contractors. | 1% (Hindu Undivided Family/Individuals) 2% (Other Persons) |
| Insurance Commission | 5% |
| Commission earned on the sale of lottery tickets | 5% |
| Any commission or brokerage | 5% |
| Rent on a) Plant & Machinery b) Land/building/furniture/fitting Rent payable by HUF or individual not covered under section 194I | (a) 2% (b) 10% 5% In case payment of rentals crosses ` 50,000 each month |
| Payment upon the transfer of immovable property (with the exception of agricultural land) | 1% |
| Any money paid as the charge for professional services/technical services/remuneration/fee/commission for directors/royalty/copyright | 10% |
Slabs for Deduction from Employees-
For the Assessment Year 2020-21, the slabs for deduction of income tax are as follows:
Male/ Female
| Income | Tax Rate |
|---|---|
| Upto `2,50,000 | Nil. |
| `2,50,001 to `5,00,000 | 5% |
| `5,00,001 to `10,00,000 | `12,500 + 20% of Income exceeding `500,000. |
| Above `10,00,000 | `1,12,500 + 30% of Income exceeding of `10,00,000. |
Senior citizen
| Income | Tax Rate |
|---|---|
| Upto `3,00,000 | Nil. |
| `3,00,001 to `5,00,000 | 5% |
| `5,00,001 to `10,00,000 | `10,000 + 20% of Income exceeding `500,000. |
| Above `10,00,000 | `1,10,000 + 30% of Income exceeding of `10,00,000. |
Very Senior citizen
| Income | Tax Rate |
|---|---|
| Upto `5,00,000 | Nil. |
| `5,00,001 to `10,00,000 | 20% |
| Above `10,00,000 | `1,00,000 + 30% of Income exceeding of `10,00,000. |
Individuals having total income below 5 lakhs, are eligible for full tax rebate of under section 87A for AY 2020-2021 (FY 2019-20)
TDS (Tax Deducted at Source) is a vital component that governs multiple income-based transactions in the country. The above-mentioned chart of rates will help you understand the applicable TDS rate vis-a-vis its specific income category. You can then factor in the deduction according to the category/categories your income falls in any.
Disclaimer
Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on above.
^Tax benefit of `46,800 u/s 80C & `7,800 u/s 80D is calculated at highest tax slab rate of 31.2% (including Cess excluding surcharge) on life insurance premium u/s 80C of `1,50,000 and health premium u/s 80D of `25,000. Tax benefits under the policy are subject to conditions under Section 80C, 80D, 10(10D) and other provisions of the Income Tax Act, 1961. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on above.
1Tax benefit of `54,600 ( `46,800 u/s 80C & `7,800 u/s 80D) is calculated at highest tax slab rate of 31.2% (including Cess excluding surcharge) on life insurance premium u/s 80C of `1,50,000 and health premium u/s 80D of `25,000. Tax benefits under the policy are subject to conditions under Section 80C, 80D, 10(10D) and other provisions of the Income Tax Act, 1961. Goods and Services Tax and Cesses, if any, will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on above.
2Tax benefit of `7,800 is calculated at highest tax slab rate of 31.2% (including Cess excluding surcharge) on health premium u/s 80D of `25,000. Tax benefits under the policy are subject to conditions under Section 80D, 10(10D) and other provisions of the Income Tax Act, 1961. Goods and Services Tax and Cesses, if any, will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on above.
3Tax benefit of `46,800 is calculated at highest tax slab rate of 31.2% (including Cess excluding surcharge) on life insurance premium u/s 80C of `1,50,000. Tax benefits under the policy are subject to conditions under Section 80C, 80D, 10(10D), 115BAC and other provisions of the Income Tax Act, 1961. Goods and Services Tax and Cesses, if any, will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on above.
COMP/DOC/Aug/2020/278/4313
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