TDS, TCS rates effective from April 1, 2021

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 FD 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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