TDS, TCS rates on interest, dividend, other non-salary payments effective April 1, 2021 – The Economic Times

Clipped from: https://economictimes.indiatimes.com/wealth/tax/tds-tcs-rates-on-interest-dividend-other-non-salary-payments-effective-april-1-2021/articleshow/81703945.cmsSynopsis

Effective from April 1, 2021, the TDS and TCS rates on these non-salary payments will be back to their original (higher) levels. Given below are the TDS and TCS rates effective for FY 2021-22.

In May 2020, the government reduced TDS and TCS rates for interest income, dividend income, rent payments and other non-salary payments by 25%. This was done to increase liquidity in the hands of individuals, especially those going through financial hardships caused by the coronavirus-induced lockdown. The reduction in TDS and TCS rates on non-salary payments came into effect on May 14, 2021, and will be applicable till March 31, 2021.

Thus, effective from April 1, 2021, the TDS and TCS rates on these non-salary payments will be back to their original (higher) levels.

This would mean that, for instance, if the interest paid on a bank fixed deposit exceeds Rs 40,000 between April 1, 2021, and March 31, 2022, then the bank would deduct tax on the interest paid at the rate of 10% instead of 7.5% in the previous financial year 2020-21.

Given below are the TDS rates applicable from April 1, 2021:

Nature of payment
Section of the Income-tax Act
TDS rate effective from April 1, 2021
Receiving accumulated taxable part of PF
Section 192A
10%
Interest received on securities
Section 193
10%
Dividend received from Mutual funds and on the company’s shares
Section 194 and 194K
10%
Interest other than Interest on Securities e.g. Fixed deposit interest
Section 194A
10%
Winnings from a lottery, crosswords or any sort of game
Section 194B
30%
Winnings from horse races
Section 194BB
30%
Insurance Commission received by an Individual
Section 194D
5%
Life Insurance Policies not exempt under Section 10(10D)
Section 194DA
5%
Commission or brokerage received except for Insurance Commission
Section 194H
5%
Payment made while purchasing land or property
Section 194IA
1%
Payment of rent by individual or HUF exceeding Rs. 50,000 per month
Section 194IB
5%
Payment made to professional or commission or brokerage of more than Rs 50 lakh and above
194M
5%
Cash withdrawal exceeding Rs 20 lakh or Rs 1 crore as the case maybe
194N
2%
Payment of Professional Fees etc.
194J
2%(FTS, certain royalties, call centre) 10%(others)
Payment in respect of deposits under National Savings Scheme
194EE
10%
Rent for plant and machinery
194- I(a)
2%
Rent for immovable property
194-I(b)
10%

TCS rates effective from April 1, 2021

Nature of receipts
Section of the Income-tax Act
TCS rates effective from April 1, 2021
Sale of Tendu Leaves
206C(1)
5.00%
Sale of Timber obtained under a forest lease
206C(1)
2.50%
Sale of timber obtained by any other mode
206C(1)
2.50%
Sale of Any other forest produce not being timber/tendu leaves
206C(1)
2.50%
Sale of scrap
206C(1)
1.00%
Sale of Minerals, being coal or lignite or iron ore
206C(1)
1.00%
Grant of the license, lease, etc. of Parking lot
206C(1)
2.00%
Grant of license, lease, etc. of Toll Plaza
206C(1)
2.00%
Grant of license, lease, etc. of Mining and quarrying
206C(1)
2.00%
Sale of motor vehicle above 10 lakhs
206C(1F)
1.00%
Sale of any other goods
206C(1H)
0.1%

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