What is the latest TDS Rates Chart for FY 2021-22 (AY 2022-23) applicable? Whether there are any changes in rates due to Covid 19 like how the TDS rates were reduced for last year?
Update – I have written the latest post on this subject. Refer to the same at “Latest TDS Rates Chart for FY 2022-23 (AY 2023-24)“.
When we receive income through different ways like Salary, Dividend income from mutual funds or stocks, commission, rent, interest on Bank Fixed Deposits / Securities etc., the providers of this income like Bank or your employer deduct the tax before transferring you such income.
TDS or tax deducted at source is a process of collecting Income Tax at the source. It is a process of deducting the tax from the original source of income.
TDS is calculated and levied on the basis of a certain threshold limit, which is the maximum level of income after which TDS will be deducted from your future income/payments. It is deducted as per the Indian Income Tax Act, 1961.
As I told earlier, apart from salary income and Bank FD earning, there are many ways TDS is deducted like interest income from the post office, insurance commission, rent payment, early EPF withdrawals, the sale of immovable property, rent payments on property etc.,
Basics of TDS (Tax Deducted at Source)
The concept of TDS was introduced with an aim to collect tax from the very source of income. 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.
Let us take an example that you deposited Rs.10,00,000 FD for a year at 8% interest. After a year, you earn the interest of Rs.80,000. Now bank will deduct TDS on this Rs.80,000 interest at the rate of 10% and deposit the same with Income Tax Department and issues you the TDS certificate which reflects this transaction.
Suppose your income (along with this Bank FD interest of Rs.80,000) is below the basic exemption limit of Rs.2,50,000, then you can file income tax returns and claim the TDS of Rs.8,000 deducted by Bank and you will get the refund of this.
However, assume that your tax slab is 30%, then you have to pay the remaining 20% tax (30%-10% TDS already deducted) on such intrest income of Rs.80,000. Thus you have to pay the tax of Rs.16,000 (Rs.24,000 Total Tax-Rs.8,000 TDS).
Many people to avoid such procedural issues submit the Form 15G/H and think that they avoided the tax. By submitting the Form 15G/H, one can avoid the TDS. But one can’t escape from the tax liability.
Latest TDS Rates Chart for FY 2021-22 (AY 2022-23)
Below are the latest TDS rate table applicable for the Financial Year 2021-22 based on the Budget 2021 amendments;
|Section||For Payment of||Threshold limit||TDS Rate %|
|192||Salary Income||Income Tax Slab||Slab rates|
(Based on old or new tax regimes)
|192 A||EPF – Premature withdrawal||Rs 50,000||10%|
If no Pan, TDS @ 30%
|193||Interest on Securites||Rs. 10,000||10%|
|193||Interest on Debentures||Rs 5,000||10%|
(Dividend other than listed companies)
(No TDS on Div Payouts by
REITs / InvITs)
|194 A||Interest other than on securities by banks / post office||Rs. 40,000|
(Rs 50,000 for Senior Citzens)
|194 A||Interest other than on securities by others||Rs. 5,000||10%|
|194 B||Winnings from Lotteries / Puzzle / Game||Rs. 10,000||30%|
|194 BB||Winnings from Horse Race||Rs. 10,000||30%|
|194 D||Payment of Insurance Commission|
(Form 15G/H can be submitted)
|Rs. 15,000||5% (Individuals)|
|194DA||Payment in respect of Life Insurance Policy||Rs 1,00,000||5%|
|194E||Payment to non-resident sportsmen/sports association||–||20%|
|194 EE||Payment of NSS Deposits||Rs 2,500||10%|
|194 G||Commission on Sale of Lottery tickets||Rs 15,000||5%|
|194 H||Commission or Brokerage||Rs 15,000||5%|
|194 I||Rent of Land, Building or Furniture||Rs. 2,40,000||10%|
|194I||Rent of Plant & Machinery||Rs. 2,40,000||2%|
(Tenant has to deduct TDS)
(Individuals who are not liable to Tax Audit)
|Rs 50,000 (per month)||5%|
|194 IA||Transfer of Immovable Property , other than Agricultural land||Rs. 50 lakh||1%|
|194IC||Payment of monetary consideration under Joint Development Agreements||–||10%|
|194J||Fees for professional or technical services||Rs 30,000||2% (or) 10%|
|194LA||Payment of compensation on acquisition of certain immovable property||Rs 2,50,000||10%|
|194 LB||Interest from Infrastructure Bond to NRI||NA||5%|
|194 LD||Interest on certain bonds and govt. Securities||NA||5%|
|194N||Cash withdrawal during the previous year from one or more account maintained by a person with a banking company, co-operative society engaged in business of banking or a post office:||> Rs 1cr||2%|
|194Q||Purchase of goods (applicable w.e.f 01.07.2021)||Rs 50 lakh||0.10%|
|206AB||TDS on non-filers of ITR at higher rates|
(applicable w.e.f 01.07.2021)
|–||5% or Twice the|
rates in force
|194P||TDS on Senior Citizen above 75 Years (No ITR filing cases)||–||Slab Rates|
Latest TDS Rate Chart FY 2021-22 (AY 2022-23) for NRIs
When it comes to TDS, the rules changes to NRIs. Hence, let us discuss on this aspect separately.
# Interest earned on Non-Resident Ordinary Account (NRO) is taxable. TDS of 30% is applicable to it. But interest earned on Non-Resident External (NRE) accounts and Foreign Currency Non-Resident (FCNR) accounts is not taxed in India. Hence, there is no tax deducted at the source on NRE and FCNR interest income.
# NRI Investments in Shares / Mutual Funds attract TDS and below are the TDS rate applicable on MF redemptions by NRIs for FY 2021-22.
|Type of Mutual Funds||STCG and TDS Rates||LTCG and TDS Rates|
|Equity Oriented Funds||15%||10% (Without indexation benefit over and above Rs.1 lakh gain)|
|Debt Mutual Funds||30% (Assuming investor falling under 30% tax slab)||On listed – 20% with indexation|
On unlisted – 10% without indexation
Misconceptions about TDS (Tax Deducted at Source)
# Avoiding TDS does not mean avoiding Tax. You just avoid the deduction of tax. However, you have to pay the tax as per the applicable rules and tax rate even if you avoided TDS. For example, in case of FDs, one can give Form 15G or Form 15H and avoid TDS. But it does not mean that such FD interest income is tax free. You have to pay the tax on such interest as per applicable tax rates.
Hence, never rush to submit Form15G/H or any method just to avoid TDs.
# If you paid the TDS, then your tax liability does not end there itself. You have to file IT return and if anything more than TDS is payable, then you have to pay it.
# All are not eligible to submit the Form 15G or Form 15H. Because only those individuals are eligible to submit the Form 15G or Form 15H whose total taxable income is NIL and also and the total of the aggregate of your income for which form 15 G can be submitted should not exceed the basic exemption limit. But sadly neither individual care about such rules nor the Banks who accept the forms.
Hope this much information is enough for you to understand the Latest TDS Rates Chart for FY 2021-22 (AY 2022-23).