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TDS Rates Chart – TDS Rates for Financial Year 2017-18: Overview
Tax Deducted at Source or commonly known as TDS is implied on various types of income and collected in accordance with provisions
mentioned in the yearly union budget. The tax slabs and rates are decided on the nature of the heads under which the income is booked. Likewise,
the other indirect taxes such as service tax, TDS are also collected prior release of a payment. The TDS rates and collection is regulated by CBTD
(Central Board for Direct Taxes).
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TDS is basically like a spot tax, deducted from the actual source of income. The same is described in the indirect tax section of Income tax Act
1961. It is implied on receiving income from various financial products. TDS is charged on various incomes earn generated in the form of
incentives, commissions, payment & dividends earned for a variety of sale, services, rent or purchase of a property, interest earned on term
deposits, etc.
The rates at which TDS is applied may vary as per the nature of income which could be between 1% – 30%. The onus to collect TDS and deposit
the same lies on the service provider or the seller.
TDS is applied on any Income or overheads such as incentive (over & above salary), interests on fixed deposit from banks, lotteries,
commission payment and rent payment. While making payments in any of these heads, a fixed rate is applied and the tax liability is
deducted prior making the payment.
The source or person who deducts TDS is referred as “Deductor”. The person to whom the payment is being done is termed as “Deductee.”.
For example, a deductor is an employer/ organization paying salary or incentive to their employee who would be a deductee.
The employer or Deductor is accountable to provide Form 16 /16A (TDS certificate) to the employee with the computation of the tax
deducted amount. NO TDS certificate can be issued for nil tax holding such as those payments which are exempted.
There are few cases when the TDS is exempted. TDS is not levied on payments in favor of RBI, or towards any other recompense to the central
government. Apart from this, TDS is exempted from the payment of interest from the following:
Banking companies
Financial corporations formed under the finance bill of union government or any state
Income Tax refund Get Free Credit
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10/2/2017 TDS Rates Chart - TDS Rates for Financial Year 2017-18
LIC, UTI and investments in co-operative societies
Interests earned in recurring deposit or any savings account held with any commercial banks or cooperative societies
Interest earned on Indira Vikas Patr (IVP), NSC or KVP
Interest earned on NRE account
Any institutions notified as Nil TDS organization
Apart from the above, TDS might not be pertinent on various other avenues as well. For example interest earned on the compensation granted
from Motor Vehicles Claims Tribunal.
TDS is basically a spot tax, deducted from the actual source of income. The same is described in the indirect tax section of Income tax Act 1961.
It is implied the income received from financial products like interest received on fixed deposits, incentives from the employer, commission’s
payments, dividends on bonds, sale/purchase or rent of any immovable property and money earned as lottery or awards. The TDS rate applicable
under different sections & subsection of is between 1- 30%.
2 Section 193 Rs. 5000 wrt to 10% of the interests earned on security investments.
debenture payment
3 Section 194 Rs. 2500 10% of proceeds from any deemed dividends
4 Section 194A Rs.5,000 10% of proceeds from interests earned on investments other
Rs. 10,000 than securities
5 Section 194B Rs.10,000 30% of prize money on lottery or gaming related winnings
11 Section 194G Rs.1500 10% of the commission money from lottery ticket selling.
15 Section 194L Rs.1 lakh @ 10% on the transfer money paid to any resident while
acquiring an immovable property
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10/2/2017 TDS Rates Chart - TDS Rates for Financial Year 2017-18
deposits held with the same PAN number, then TDS will be applicable at a rate of 10% from the interest payout or maturity proceeds whichever
happens earlier Let's understand with an example
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Mr. X is holding a Fixed Deposit of Rs 15 Lakh booked for 1 year term & rate of interest is 10% p.a. He would earn Rs 150,000 as interest on
maturity after 1 year. The bank in such as case will deduct TDS @ 10% of Rs 150,000 i.e. 15,000 and deposits the TDS amount with Income Tax
Department on the behalf of customer Mr. X. In return, Mr. X would receive a TDS certificate, which is generally referred as Form 16A in
taxation terms.
The TDS rates as applicable to the fiscal year 2017 -18 are given below. Get Free Credit
Report
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10/2/2017 TDS Rates Chart - TDS Rates for Financial Year 2017-18
S Nature of payment TDS Rate Applicable Section
No
3 Dividend accrued (apart from the dividend as @ 10% (20%, in case of invalid/no Section 194
mentioned in the section 115-O PAN)
6 Commission payment for Insurance agents N/A (in case Form 15G/15H is Section 194D
filled)*
*effective from 1st June 2017.
3 Income from prize money on lotteries, card games, crossword @ 30% Section 194B
puzzles or games within the ambit of Indian Law
5 Deposit made under the National Savings scheme @ 10% Section- 194EE
7 Commission money earned for selling lottery tickets @5% Section 194G
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10/2/2017 TDS Rates Chart - TDS Rates for Financial Year 2017-18
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Resources
Aadhaar Authentication
Aadhaar Card
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