Laws on Withholding Time and Tax rate of some of the Tax (TDS, Tax Deducted at Source)

The following is a detailed description of the withholding time and tax rate of some of the tax withholding tax (TDS, Tax Deducted at Source) that everyone is more concerned about.

 

TDS is a component of income tax and various forms of withholding tax

According to the 2017-18 budget. Some TDS (source withholding tax) tax rates are shown in the table below

 

Nature of income

 

Deduction time

 

Tax rate

 

192

 

Wage

When paying wages (monthly)-Estimate the total tax payable on wages in a fiscal year, and withhold the part that exceeds the tax exemption limit

 

Progressive tax rate: please click on the article “Focus | India’s current income tax rate” in front of the table to understand

(If there is no tax card, 30%)

 

192A

 

The cumulative amount of the Employees Provident Fund (According to the “Regulations of the Employees Provident Fund Act 1952”)

(Effective from June 1, 2015)

Starting from June 1, 2016, the accumulative portion exceeding Rs.50,000 /- will be withheld. (Previously Rs.30,000 /-)

10%

(If there is no tax card, 30%)

193

 

Securities interest

Withholding at the time of payment, if the interest exceeds Rs.10,000 /-, the bond (Debentures) limit is Rs.5000 /-;

 

 

10%

(If there is no tax card, 20%)

)

194

 

Dividends other than section 115O

Before payment to shareholders, except for the dividends distributed under Item 115O, the portion exceeding Rs.2,500 /- will be withheld.

10%

(If there is no tax card, 20%)

194A

 

 

Interest other than “securities interest”

Withholding is carried out when paying.

The amount exceeds Rs.5,000 /-.

In the case of bank interest and loan interest from cooperative banks to its members, the limit is Rs.10,000/-.

10%

(If there is no tax card, 20%)

194B /194BB

 

Income earned by winning lottery tickets, crosswords, card games, horse racing, etc.

Tax on Lottery Income:

Rs.5000/- (April 1, 2016 to May 31, 2016)

Rs.10000/- (after June 1, 2016)

race:

Rs.5000/- (April 1, 2016 to May 31, 2016)

Rs.10000/- (after June 1, 2016)

30%

(If there is no tax card, 30%)

194C

 

Payment to contractor/subcontractor

Payment era deduction.

The amount of a specific contract exceeds Rs.30,000 /- or the total annual contract amount exceeds Rs.75,000 /- (from June 1, 2016, increased to Rs.100,000)

2%-Payments to contractors/subcontractors other than individuals/HUF (Hindu Indivisible Families)

(If there is no tax card, 20%)

 1% –

Payment to individuals/HUF contractors/subcontractors (20% if there is no tax card)

194D

 

Tax on Insurance Commission

Payment era deduction,

Rs.20000/- (from April 1, 2016 to May 31, 2016) or

Rs.15000/- (after June 1, 2016)

10%

April 1, 2016 to May 31, 2016

(5% effective from June 1, 2016)

(If there is no tax card, 20%)

194DA

 

Life insurance premium payment

 

(Including bonus)

The payment period is deducted, and the amount or the total annual amount exceeds Rs.1,00,000 / -.

2%

(1%, effective from June 1, 2016)

(If there is no tax card, 20%)

194E

 

Payments to non-resident athletes or sports associations

Payment era deduction

20%

(If there is no tax card, 20%)

194EE

 

Deposit payments under the National Savings Scheme (NSS)

Payment era deduction, Rs.2500 / -.

20% (April 1, 2016 to May 31, 2016)

 

10% (after June 1, 2016)

(If there is no tax card, 20%)

194G

 

 

Tax on Commission for selling lottery tickets

 

Payment era deduction

Rs.1,000/- (from April 1, 2016 to May 31, 2016) or Rs.15000/- (effective from June 1, 2016)

10%

From April 1, 2016 to May 31, 2016

5% (effective from June 1, 2016)

(If there is no tax card, 20%)

194H

 

Tax on Pay brokerage commission

Payment era deduction, Rs.5000 / -. (Rs.15000/-, effective from June 1, 2016)

10%

From April 1, 2016 to May 31, 2016

5% effective from June 1, 2016

(If there is no tax card, 20%)

194I

 

Tax on Rent 

Payment era deduction, Rs.1,80,000/-,

 

10%-rent from renting out land, buildings or furniture

(If there is no tax card, 20%)

2%-for rent

Machinery, factory or

Equipment rental (without tax card, 20%)

194IA

 

Income from the transfer of specific real estate other than agricultural land

 

Payment times are deducted, the land is located at the designated location and

The amount exceeds Rs.50 Lakh.

1%

 

(If there is no tax card, 20%)

194IB

 

 Rent paid by individuals or HUF, but not including rent under Article 194I (effective from June 1, 2017)

 

 

Pay the rent for the last month of the previous year or the last month of the lease term (when the house is idle during the year), and pay the age deduction.

Rs.50,000/-, deduct 5%

 

 

194IC

 

Payment of consideration (not in kind) based on “joint development agreement” or other similar agreements

Payment era deduction.

All income, deducted 10% (effective from April 1, 2017)

194J

 

Income from the following items:

 

a) Professional service fees,

b) Technical service fee

c) copyright,

d) Directors’ salary/fees/commissions

e) Carrying out any non-business related activities

f) Share any information that has nothing to do with proprietary technology, patents, copyrights, etc.

Payment period deduction, Rs.30,000 /-

10%

(If there is no tax card, 20%)

194LB

 

Payment of interest on infrastructure debt funds (IDF, a fund dedicated to investment in infrastructure construction) to non-residents or foreign companies

 

Payment era deduction

 

(If there is no tax card, 20%)

194LBC

 

Financial asset securitization trust investment income (effective from June 1, 2016)

Payment era deduction

25%-Resident individual or HUF

30%-other residents

40%-non-resident company,

30%-non-residents other than companies

 

195

 

other

Payment era deduction

 

 Applicable average tax rate

Applicable surcharges, education taxes, secondary and higher education taxes will be added to the above tax rates.

 

 

FAQ

After understanding the TDS tax rates of the above different industries, some basic questions will be summarized and answered in the form of question and answer:

1. As a foreign company with no entity in India, when India pays our company, do we need to pay taxes in India? If necessary, what is the tax rate? How to pay?

Ans. Foreign companies or individuals are required to pay income tax in India to obtain income from India. Taxes declared with different explicit declarations will be withheld by the cooperating Indian party and paid to the government at different TDS rates.

It can be concluded from the above table that the tax rate of TDS with a tax card (PAN CARD) and without a tax card is very different, so when your Indian partner requires you to obtain a tax card in India, the purpose is to reduce the cost of remittance A large amount of TDS was imposed in India.

 

2. If the annual income of the employees of my Indian company does not reach Rs.250,000/-, do I have to withhold TDS every month?

Ans. Although the company’s employees’ salaries have not reached the statutory tax limit, there is no guarantee that the employees will have other income.

The employer can make withholding. After the end of the previous fiscal year, the employee’s total income did not exceed the statutory tax limit. Relevant tax authorities apply for tax refunds.

 

3. If the TDS agent fails to perform the obligation to withhold TDS, or fails to pay the government after withholding, what will be the consequences?

Ans. The taxpayer shall not reduce the tax payable due to the omission of the payment agent.

 

4. How do I know how much TDS has been deducted from my income by the withholding agent?

Ans. Ask for a TDS Certificate from the payment agent, or register an account and password on the https://incometaxindiaefiling.gov.in#sthash.hdTbWvic.dpuf website to view your Form 26AS.

 

5. The withholding agent did not give me a TDS Certificate. Can I claim tax refund with the relevant authorities?

Ans. Yes, you can.

 

6. What is the difference between PAN and TAN?

Ans. PAN (Permanent Account Number) is the “tax card” that taxpayers need to obtain, and TAN (Tax Deduction Account Number) is the withholding tax number that the taxpayer should obtain.

 

7. How to define residents and non-residents?

Ans. Natural person: Regardless of nationality, spent 182 days in India last year.

 

Company: A company registered under the Indian Companies Act, such as a subsidiary of a foreign company that is a resident of India. The liaison office, project office, and branch are all non-residents. However, the control and management of foreign companies in the previous year was entirely in India, and they may be regarded as Indian residents.

8. What materials do foreign companies need to prepare to obtain a tax card?

Ans. The business license of the certified company and fill in the corresponding application form.