TDS stands for 'Tax Deducted at Source'. It was introduced to collect tax at the source from where an individual's income is generated. The government uses TDS for collecting the tax and it helps pan holder minimize tax evasion by taxing the income (partially or wholly) at the time it is generated rather than at a later date. TDS is applicable on incomes such as salaries, interest received, commission received, dividends etc.
Tax Collected at Source (TCS) is income tax collected in India payable by the seller who collects in turn from the buyer and it is deducted under section 206C of Income Tax Act, 1961 at the sale of some goods which are specified in chart given below.
| Section | Description | Threshold Limit (in Rs.) | Rates |
|---|---|---|---|
| 192 | Salaries | -- | Normal slab rate |
| 192 A | Premature withdrawal from EPF | 50000 | 10 |
| 193 | Interest on securities - 8% Savings (Taxable) Bonds, 2003 or 7.75% Savings (Taxable) Bonds, 2018 during the financial year | 10000 | 10 |
| 193 | Interest on securities - Interest on securities for money issued by or on behalf of any local authority/statutory corporation, listed debentures of a company(other than demat form), any other interest on securities | 5000 | 10 |
| 194 | Dividends | 5000 | 10 |
| 194 A | Interest (Banking co., co-operative society engaged in banking, post office) | 40000 | 10 |
| 194 A | Interest (Any other person) | 5000 | 10 |
| 194 B | Winning from lotteries | 10000 | 30 |
| 194 BB | Winning from Horse race | 10000 | 30 |
| 194 C | || Contractor-Single transaction-Individual/HUF || || Others || |
30000 | || 1 || || 2 || |
| 194 C | Contractor – Consolidated Payment During the F.Y. Individual/HUF Others |
100000 | 1 2 |
| 194 D | Insurance commission Other than Company Company |
15000 | 5 10 |
| 194 DA | Maturity of Life insurance policy | 100000 | 5 |
| 194 EE | NSS | 2500 | 10 |
| 194 F | Repurchase units by MFs | -- | 20 |
| 194 G | Commission-Lottery | 15000 | 5 |
| 194 H | Commission/Brokerage | 15000 | 5 |
| 194 I | Rent of - Plant/Machinery /Equipment - Land and Building/Furniture & Fixture |
240000 | 2 10 |
| 194 I A | Transfer of certain immovable property other than agriculture land | 50 Lakh | 1 |
| 194 I B | Rent by Individual/HUF | 50000 per month | 5 |
| 194 I C | Payment under Joint Development Agreements to Individual/HUF | -- | 10 |
| 194 J | Professional Fees | 30000 | 10 |
| 194 J | Technical Fees (w.e.f. 01.04.2020) | 30000 | 2 |
| 194 J | Payment to call centre operator (w.e.f. 01.06.2017) | 30000 | 2 |
| 194 J | Director's fees | -- | 10 |
| 194 K | Payment of any income in respect of (a) units of a mutual fund as per section 10(23D); or (b) the units from the administrator; or (c) units from specified company (w.e.f. 01.04.2020) |
5000 | 10 |
| 194 LA | Compensation on transfer of certain immovable property other than agriculture land (TDS exempted if covered under RFCTLARR Act w.e.f. 01.04.2017) |
250000 | 10 |
| 194 LBA | Income from units of business trust - interest received or receivable from a special purpose vehicle; or - dividend referred to in sub-section (7) of section 115-O |
-- | 10 10 |
| 194 LBA | Distribution of rental income to unit holders - Other than Comapany - Company |
-- | 10 10 |
| 194 LBB | Income in respect of units of investment fund - Other than Company - Company |
-- | 10 10 |
| 194 LBC | Income in respect of investment in securitization fund - Individual/HUF - Company - Other Person |
-- | 25 30 30 |
| 194 N | Payment of certain amount in cash | 1 Crore | 2 | 194 M | Certain payments by Individual/HUF | 50 Lakh | 5 |
| Section | Description | Rates |
|---|---|---|
| 206 C | Scrap | 1 % |
| 206 C | Tendu leaves | 5 % |
| 206 C | Timber obtained under a forest lease or other mode | 2.5 % |
| 206 C | Any other forest produce not being a timber or tendu leaves | 2.5 % |
| 206 C | Alcoholic liquor for human consumption and Indian made foreign liquor | 1 % |
| 206 C | Parking lot, toll plaza, mining and quarrying (other than mining and quarrying of mineral oil, petroleum and natural gas) | 2 % |
| 206 C | Minerals, being coal or lignite or iron ore | 1 % |