As per this concept, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government. The deductee from whose income tax has been deducted at source would be entitled to get credit of the amount so deducted on the basis of Form 26AS or TDS certificate issued by the deductor.
· How to pay Tax Deducted/Collected at source?
Tax deducted or collected at source shall be deposited to the credit of the Central Government by following modes:
1) Electronic mode: E-Payment is mandatory for
a) All corporate assesses; and
b) All assesses (other than company) to whom provisions of section 44AB of the Income Tax Act, 1961 are applicable.
2) Physical Mode: By furnishing the Challan 281 in the authorized bank branch.
- Tax Rates for FY 2019-20
| Section | Particulars | Threshold limit |
| 192 | No deduction of tax at source from salaries | If net taxable income is less than the maximum amount which is not chargeable to tax (i.e. Rs. 2,50,000 for an individual other than senior citizen, Rs. 3,00,000 for Senior Citizens and Rs. 5,00,000 for Super Senior Citizens) |
| 192A | No TDS from payment of accumulated balance of provident fund account due to an employee | If taxable premature withdrawal amount is less than Rs. 50,000. |
| 193 | No TDS from interest paid on debentures issued by a company in which public are substantially interested. Provided interest is paid by account payee cheque to resident individual or HUF | If amount of interest paid during the financial year does not exceed Rs. 5,000 |
| 193 | No TDS from interest paid on 8% Saving (Taxable) Bonds 2003 or 7.75% Savings (Taxable) Bonds, 2018 (applicable from A.Y 2019-20) to resident persons | If amount of interest paid or likely to be paid during the financial year does not exceed Rs. 10,000 |
| 193 | No TDS from interest on 6.5% Gold bonds, 1977 or 7% Gold bonds, 1980 paid to resident individual | If bonds held by other than non-resident individual (or behalf of any other person) and makes declaration to the payer that the nominal value of such bonds does not exceed Rs. 10,000 at any time during the period to which interest relates. |
| 194 | No TDS from dividend paid by Indian company by an account payee cheque to individual | If aggregate amount of dividend paid or credited during the financial year does not exceed Rs. 2,500. |
| 194A | No TDS from interest other than on securities paid by a banking company or co-operative society engaged in carrying on the business of banking | If amount of interest paid or credited on time deposit during the financial year exceeds Rs 40,000 (for all type of payee)/Rs 50,000 (from 01/04/2018 if payee is resident senior citizen) |
| 194A | No TDS from interest on any deposit with a post office under Senior Citizens Saving Scheme Rules, 2004( Notified scheme) | If amount of interest paid or credited on time deposit during the financial year exceeds Rs 40,000 (for all type of payee)/Rs 50,000 (from 01/04/2018 if payee is resident senior citizen) |
| 194A | No TDS from interest other than on securities if payer is any other person other than post office or banking company or co-operative society engaged on the banking. | If amount of interest paid or credited on time deposit during the financial year exceeds Rs 5,000. |
| 194B | No TDS from Lottery / Cross Word Puzzles | If amount paid during the financial year does not exceed Rs. 10,000. |
| 194BB | No TDS from winnings from horse races | If amount paid during the financial year does not exceed Rs. 10,000. |
| 194C | No TDS to contractor to resident person | a) If sum paid/credited to a contractor in a single payment does not exceed Rs. 30,000 b) If sum paid/credited to contractor in aggregate does not exceed Rs. 1,00,000 during the financial year. |
| 194D | No TDS from insurance commission paid or payable during the financial year to resident person | If amount paid or credited during the financial year does not exceed Rs. 15,000 |
| 194DA | No TDS from sum payable under a life insurance policy (including bonus) to a resident person | If amount paid or payable during the financial year is less than Rs. 1 lakhs. |
| 194EE | No TDS from payments made out of deposits under NSS | If amount of payment or aggregate amount of payments in financial year is less than Rs. 2,500. In case of payment is received by legal heirs no tax shall be deducted. |
| 194G | No TDS from commission paid on sale of lottery tickets | If amount of income the financial year does not exceed Rs. 15,000 |
| 194H | No TDS from payment of commission or brokerage | If amount paid or credited during the financial year does not exceed Rs. 15,000. Further no tax to be deducted from commission payable by BSNL/ MTNL to their Public call office franchisees |
| 194-I | No TDS on payment of rent in respect of any land or building, furniture or fittings or plant and machinery to a resident person | If amount paid or credited during the financial year does not exceed Rs. 240,000. No tax deductions shall be made under this section if rent is paid to a business trust, being a real estate investment trust, in respect of any real estate asset, referred to in section 10(23FCA), owned directly by such business trust. |
| 194-IA | No TDS on payment of consideration for purchase of an immovable property(other than agriculture land) to a resident transferor | If consideration paid or payable for transfer of an immovable property is less than Rs. 50 Lakhs. |
| 194IB | No TDS on payment of rent of any land or building or both by an individual/HUF [whose books of account are not required to be audited under section 44AB to resident person. | If amount of rent does not exceed Rs. 50,000 for a month or part of a month. |
| 194J | No TDS on payment of fee for professional services, fee for technical services, royalty, any sum referred to in section 28(va) to a resident person | If amount paid or credited during the financial year does not exceed Rs. 30,000 |
| 194LA | No TDS on payment of compensation/enhanced compensation on compulsory acquisition of immovable property (other than Agricultural Land) to a resident person | If such sum amount does not exceed Rs. 2,50,000 during a financial year. |
| 194M | No TDS is required to be deducted on sum payable to a person with respect to contractual work, commission, brokerage or for professional services | If the aggregate amount paid or credited during the financial year does not exceed Rs. 50 lakhs. |
| 194N | No TDS is required to be deducted on the amount withdrawn in cash from any account | If the aggregate amount withdrawn does not exceed Rs. 1 crore during the previous year |