DEDUCTION, COLLECTION AND RECOVERY OF TAX

Section Payer Payee Time of deduction Rate Threshold Remarks

192: Salary Resident/NR Employee On payment. Average rate Slab rates • If employee intends to opt for
employer S.115BAC, he need to intimate
Eligible start up to employer
referred to in S. 80- • If employee is working for more
IAC, responsible for than employer, he may furnish
paying any income the salary of other employer for
to the assessee by TDS
way of perquisite • Salaries in forex – convert as per
being any specified exchange – convert as per TTBR
security or sweat as on the date on which TDS is
equity shares to be deducted [Rule 26]
allotted or • Relief u/s 89(1) to be calculated
transferred, for arrears of salary paid to
directly or employees of Government or to
indirectly, free of employees of companies, co-
cost or at operative societies, local
concessional rate authorities, universities,
to the assessee - 14 institutions, associations or
days from the bodies
earliest of the • Employer to furnish Form 12BA
following dates - giving correct and complete
a) after the expiry particulars of perquisites or
of 48 mon from the profits in lieu of salary provided
end of the AY to him and the value
b) from the date of • Employee to furnish Form 12BB
the sale of such giving the evidence of HRA
specified security [Name, address, PAN of landlord
or sweat equity if the rent paid >Rs. 1Lakhs], LTC
share by the [details of expense], Int on HP
assessee; or [Name, address and PAN of
c) from the date of lender], details of investment or
the assessee expense for Chapter VIA
ceasing to be the deduction
employee of the • Tips collected by employer to be
employer paid to employee not covered
under salaries and not liable for
Such tax has to TDS u/s 192 [ITC Ltd v. CIT
deducted or paid (2016) 384 ITR 14]
on the basis of
rates in force for
the financial year in
which the said
specified security
or sweat equity
share is allotted or
transferred.
192A: Premature Trustees of EPF Employee At the time of 10% Rs.50,000 • If the employee makes
withdrawal from scheme or any payment premature withdrawal of fund
Employees person making from RPF before 5 years of
Provident Fund payment of continuous service (other than
accumulated the cases of termination due to
balance due to ill health, contraction or
employees discontinuance of business,
cessation of employment etc.)
and does not opt for transfer of
accumulated balance to the new
employer, the withdrawal
would be subject to tax.
• Failure to furnish PAN – TDS at
MMR
193: Interest on Any person Resident Credit or Payment, 10% • No TDS on interest payable on:
securities responsible to pay whichever is earlier • National Defence Bonds (1972)
such interest held by resident Individual -
4.25%
• 4.25%/4.75% National Defence
Loan payable to Individual
(including non-resident)
• National DevelopmentBonds
• 7 years NSC (IVth issue)
• Certain notified debentures
issued by any
institution/authority/public
sector co./co-op
society.(PFCL/IRFCL u/s 54EC)
• Gold bonds - 1977/1980
 • Securities of CG/SG [However, if
interest payable on 8% Savings
(Taxable) Bonds, 2003 exceed
Rs. 10,000, then TDS
applicable].
• Debenture (of a Company in
which Public substantially
interested) interest payable to
resident Individual/HUF, if it
does not exceed Rs. 5,000 and is
paid by Account payee
cheque/draft/ECS.
• Interest payable to LIC/GIC/any
other insurer

194: Dividends Principal Officer Shareholder Before making any 10% Rs.5,000 • No tax is to be deducted in case
of(a) an Indian payment by any of a shareholder, being an
Company; or mode in respect of individual, where the dividend is
(b) Company any dividend or paid by any mode other than
which prescribed before making any cash.
arrangement for distribution or
declaration & payment • The TDS provisions will not
payment of apply to such dividend credited
dividend u/s 2(22) or paid to
within India a) LIC, GIC, subsidiaries of GIC or
any other insurer provided the
shares are owned by them, or
they have full beneficial interest
in such shares
b) a business trust by a special
purpose vehicle

194A: Interest other All assessees, Resident Credit or Payment, 10% • Rs. 40,000 No TDS, if:
than interest on except Individuals whichever is earlier [if payment • Paid/credited to Banking Co./
securities & HUF whose made by Financial corporation
total sales, gross Banking Co/ established under Central, State,
receipts or Co-op Provincial Act/LIC/UTI/Co-op
turnover from the Society/ society engaged in business of
business or engaged in banking/such other institution,
profession carried business of association, which CG may
on by him do not banking/ notify.
exceed Rs. 1 crore Post Office] • Paid/credited by firm to its
in case of business partner
and Rs. 50 lakhs in • Rs. 50,000 • A co-operative bank other than
case of profession in case mentioned in (i) above is
during the payment is required to deduct tax at source
immediately to senior on payment of interest on time
preceding citizen by deposit. However, it is not
financial year bank/co-op required to deduct tax from the
society/post payment of interest on time
Section 194A not applicable in respect of Interest on FD made by/in the office deposit, to a depositor, being a
name of Registrar General (‘ROG’) of HC[UCO Bank v DCIT (2014) Del. HC] co-operative society.
Funds kept with bank under court custody. It was held that the interest on • Rs.5,000 • However, a cooperative society
the FD was also part of funds which was under the custody of HC. ROG was [if payment is liable to deduct tax if -
not a recipient of such amount of interest on it. ROG is not “payee” for the made by a) the total sales, gross receipts
purpose of section 194A. Thus, 194A not applicable (Also, accepted by CBDT any other or turnover of the co-operative
vide circular no. 23/15,dated 28thDec 2015) person] society exceeds Rs.50 crore
during the financial year
immediately preceding the
financial year in which interest is
credited or paid; and the amount
of interest or the aggregate
amount of interest credited or
paid, or is likely to be credited or
paid, during the financial year is
more than Rs. 50,000
b) in case of payee being a senior
citizen and Rs.40,000, in any
other case.
• Thus, such co-operative society
is required to deduct tax under
section 194A on interest
credited or paid by it -
a) to its member or to any other
co-operative society; or
b) in respect of deposits with a
primary agricultural credit
society or a primary credit
society or a co-operative land
 mortgage bank or a co-operative
land development bank or
c) in respect of deposits with a
co-operative bank other than a
co-operative society or bank,
engaged in carrying on the
business of banking
• Paid/credited in respect of
deposits notified by CG
• Payment of interest on the
compensation awarded by the
Motor Accidents Claims
Tribunal, where the amount
does not exceed Rs. 50,000.
• Income on Zero Coupon Bonds
• Interest paid/payable by SPV to
Business trust [since exempt u/s
10(23FC)]
• No deduction of tax at source
194A on payment made to a
member of Schedule Tribe
referred u/s 10(26) by a
Scheduled Bank. The payment
should not exceed Rs. 20 Lakhs
• TDS on the interest income
accrued to the minor is required
to be deducted and reported
against PAN of the minor child
unless a declaration is filed
under Rule 37BA(2) that credit
for tax deducted has to be given
to another person.
• In case of deposits under the
Capital Gains Accounts Scheme,
1988 where the depositor has
deceased:
a) TDS on the interest income
accrued for and upto the period
of death of the depositor is
required to be deducted and
reported against PAN of the
depositor, and
b) TDS on the interest income
accrued for the period after
death of the depositor is
required to be deducted and
reported against PAN of the legal
heir,
unless a declaration is filed under
Rule 37BA(2) that credit for tax
deducted has to be given to another
person.

194B: Winnings Any person Any Person Payment Resident- 30% Rs.10,000/- 1. If winnings are wholly in kind, or
from Lottery/ Non-resident- (per payment) partly in cash and partly in kind, but
Crossword Puzzles 30%(+)SC the cash is not sufficient to meet the
(+)EC TDS liability in respect of the whole
(u/s 115BB) winnings, then, the payer shall
release the prize only if either-
a) He has collected the amount
equivalent to TDS amount from the
payee OR
b) He insists the payee to make the
TDS payment on his own and submit
the proof to him.
Otherwise, payer himself will be
liable to pay TDS from his own
pocket.
2. Amount accruing on lotteries lying
unsold with lottery agent shall be
considered as winnings from lottery
and Section 194B shall be applicable,
irrespective of the head under which
theincome is taxable.
[Manjoo & Co. (2011) Ker.HC]
194BB: Winnings Licensed Book Any Person Payment Resident-30% Rs. 10,000
from Horse Races Maker/Person Non-resident-
holding a license 30%(+)SC
for betting/ (+)EC
 wagering/horse (u/s
racing in a race 115BB)
course granted by
Govt.
194C: Payment to All Assessees, Resident Credit or Individual/ HUF- Rs.30,000 for No TDS u/s 194C in the following
contractor/ except Individuals Payment, 1% single contract cases:
sub-contractor & HUF who has whichever is earlier &  Personal expenditure of
total sales, gross Others- 2% Rs. 1,00,000 for Individual/HUF
receipts or aggregate in a  Contractor engaged in
turnover from the F.Y. business of Plying, Hiring or Leasing
business or goods carriages, where he owns 10
profession carried or less goods carriages at any time
on by him not during the P.Y. & furnishes a
exceeding declaration to that effect along with
Rs. 1 crore in case PAN to the payer.
of business and
Rs. 50 lakhs in Work includes -
case of profession • advertising;
during the FY • broadcasting and telecasting
immediately including production of
preceding the FY programmes for such
in which such sum broadcasting or telecasting;
is credited or paid • carriage of goods or passengers
to the account of by any mode of transport other
the contractor. than by railways;
• catering;
• manufacturing or supplying a
product according to the
requirement or specification of a
customer by using material
purchased from such customer
or its associate, being a person
related to the customer in such
manner as defined u/s 40A(2)(b)
• In such a case, tax shall be
deducted on the invoice value
excluding the value of material
purchased from such customer
or its associate, if such value is
mentioned separately in the
invoice. Where the material
component has not been
separately mentioned in the
invoice, tax shall be deducted on
the whole of the invoice value.
• In case of Owner/Seller of the
natural gas sells as well as
transports the gas to the
purchaser till the point of
delivery, it is contract of sale and
hence no TDS.
• Where the content is produced
as per the specifications
provided by the broadcaster/
telecaster and the copyright of
the content/programme also
gets transferred to the
telecaster/ broadcaster, such
contract is covered by the
definition of the term ` work’ in
section 194C
• However, in a case where the
telecaster/broadcaster acquires
only the telecasting/
broadcasting rights of the
content already produced by the
production house, there is no
contract for ‘’carrying out any
work”, as required in section
194C(1).
• section 194C will be applicable to
the amounts paid as cooling
charges by the customers of the
cold storage
• payment made by an assessee
engaged in transportation
of building material and
transportation of goods to
contractors for hiring dumpers
 would be subject to 194C and
not 194I
194D: Any person Resident Credit or Payment, 5% Rs. 15,000 p.a. –
Insurance whichever is earlier
Commission
194DA: Any Sum Insurance Resident Payment 5% <Rs. 1,00,000 ➢ NO TDS, if maturity proceeds of a
under Life Insurance Companies p.a. LIC including bonus is exempt u/s
Policy 10(10D).
194E: Any Person Non-resident Credit or Payment, 20%(+)SC (+)EC – Incomes Covered:-
Payments made to sportsman or whichever is earlier (A) Sportsmen(Including Athlete)
non-resident entertainer or ➢ Participation in any game in India,
sportsman sports except card game of gambling etc.
(incl.athelete) / association ➢ Contribution of articles in
entertainer/ Newspapers, Magazines or
sports association Journals
u/s 115BBA ➢ Advertisement
(income shall be subject to provision
TDS u/s 195)
(B) Entertainer
➢ Performance in India
(C) Sports Association
➢ Amount guaranteed to such
association in relation to any
game/ sport played in India
194EE: Payments Any person Any person Payment 10% Rs. 2,500 p.a. NO TDS, if payment is made to the
under National legal heirs/representative of
Saving Scheme deceased assessee.

194G: Commission, Any person being Any person Credit or Payment, 5% Rs. 15,000 Discount given on purchase of
etc. on Sale of Stockist, whichever is earlier lottery is NOT considered as
Lottery Tickets Distributor, etc. of commission.
Lottery Ticket
194H: Brokerage & All Assessees, Resident Credit or 5% Rs. 15,000/- • Transaction related to buying
Commission except Individuals Payment, and selling of securities: No TDS
& HUF except an whichever is earlier on brokerage and commission
individual or HUF on securities.
whose total sales,
gross receipts or • No TDS is attracted on payments
turnover from the made by television
business or channels/newspaper companies
profession carried to the advertising agency for
on by him does booking or procuring of or
not exceed Rs. 1 canvassing for advertisements.
crore in case of [CBDT Circular]
business and Rs.
50 lakhs in case of • However, if the agreement
profession during specifically has the clause of
the FY agency, TDS on amount retained
immediately by accredited advertising
preceding FY year agencies out of remittance of
in which such sale proceeds of “airtime”
commission or purchased from Doordarshan
brokerage is and sold to customers Director,
credited or paid Prasar Bharati v. CIT [2018] 403
ITR 161 (SC)

• No TDS by the airline company

on difference between the
maximum published price and
the minimum fixed commercial
price as the same is not
“additional special commission”
in the hands of the agents.
Further, the airline company
would have no information
about the exact rate at which the
tickets were ultimately sold by
its agents. [CIT v. Qatar Airways
(2011) 332 ITR 253]

• When the licensed stamp

vendors take delivery of stamp
papers on payment of full price
less discount and they sell such
stamp papers to the retail
customers, neither of the two
activities (namely, buying from
the Government and selling to
the customers) can be termed as
 service in the course of buying
and selling of goods. The
discount on purchase of stamp
papers, therefore, does not fall
within the expression
“commission or brokerage” to
attract the provisions of tax
deduction at source u/s 194H.
CIT v. Ahmedabad Stamp
Vendors Association (2012) 348
ITR 378 (SC)

• TDS u/s 194H deductible on

discount given on supply of SIM
cards by a telecom company to
its distributors Vodafone Essar
Cellular Ltd. v. ACIT (TDS) (2011)
332 ITR 255 (Ker.)

• No TDS on incentives given to

stockists and distributors by a
manufacturing company CIT v.
Intervet India P Ltd (2014) 364
ITR 238 (Bom)

• No TDS u/s 194H on payment

made by the assessee-bank for
services rendered by M/s. NFS, a
network of shared ATMs in India
CIT and another v. Corporation
Bank [2021] 431 ITR 554 (Kar)
194-I: Rent (Lease or All assessees, Resident Credit or Payment, 2% for Plant, Rs. 2,40,000 1. TDS is NOT attracted in case of
Sub-lease) except an whichever is earlier machinery & p.a. Rent credited/paid to business
individual or HUF Equipment trust being REIT as per Section
whose total sales, 10(23FCA).
gross receipts or 10% for Land, 2. Income from co-owned property
turnover from the Building, is assessable in the hands of each
business or Furniture or co-owner on his share as
profession carried fittings provided in section 27 of the Act,
on by him does so that the limit for TDS has to be
not exceed Rs. 1 applied with reference to each co-
crore in case of sharer & not with reference to
business and Rs. aggregate rent payable for the
50 lakhs in case of property.
profession during Landing/parking charges paid by airline 3. section 194-I shall not be
the FY co. to Airport authority of India are not applicable on payment of PSF by
immediately for use of land per se & thus cannot be an airline to Airport Operator
treated as rent to attract TDS u/s 194-I
preceding FY year 4. TDS shall apply on rental amount
– [Japan Airlines Co./Singapore Airlines
in which such Ltd. (2015) (SC)] without including GST
commission or Payment made for use of passive 5. Tax u/s 194-I will not have to be
brokerage is infrastructure facility such as mobile deducted on ‘lump sum lease
credited or paid tower shall be subject to TDS u/s 194-I premium’ or ‘one time upfront
& not 194C, since the underlying object
during preceding of arrangement was USE of passive
lease charges’ paid by assessee for
F.Y. infrastructure facility. [Indus Towers acquiring long term leasehold
LTD. v CIT (2014) Del. HC] rights for land or any other
property, if there is no provision in
lease agreement for adjustment of
the premium amount against
annual rent paid.
If rent is paid for advertisement
hoardings, then TDS u/s 194C will be
attracted. However, if space is taken
on rent and then advertisement
hoarding is put up, then TDS u/s 194I
will be attracted
194-IA: Transfer of Any person Resident Credit or Payment, 1% <Rs.50 Lakhs ➢TDS u/s 194-IA is attracted when
Immovable Property whichever is earlier amount of sale consideration (not
other than FMV or stamp duty value of the
Agricultural Rural property) per property is Rs.
Land 50,00,000 or more.
➢No TDS, if the immoveable
property is owned by 2 or more
individuals, the value of whose
individual share is below Rs. 50
Lakhs each.
➢ No requirement to obtain TAN
➢TDS on compulsory acquisition of
property u/s 194LA
➢Consideration for transfer of any
immovable property includes all
 charges of the nature of club
membership fee, car parking fee,
electricity or water facility fee,
maintenance fee, advance fee or
any other charges of similar
nature, which are incidental to
transfer of the immovable
property
194-IB: Payment of Individual/HUF, Resident Credit of rent for 5% 50,000 ➢No requirement to obtain TAN
rent by certain except an the March or last ➢Where the tax is required to be
individuals or HUF individual or HUF month of tenancy deducted as per the provisions of
whose total sales, (if property is section 206AA or section 206AB,
gross receipts or vacated) or such deduction shall not exceed
turnover from the Payment, the amount of rent payable for the
business or whichever is earlier last month of the previous year or
profession carried the last month of the tenancy, as
on by him exceed the case may be.
Rs. 1 crore in case
of business and Rs.
50 lakhs in case of
profession during
the FY
immediately
preceding FY year
in which such
commission or
brokerage is
credited or paid
during preceding
F.Y.
194-IC: Payment Joint developer Resident Credit/payment 10% ➢Payment of consideration in cash
under specified agreement whichever is earlier only is included (not in kind)
agreement ➢Section 45(5A) applicable
194J: Payment of All Assessees, Resident Credit or 2% in case of Rs. 30,000/- p.a. No TDS u/s 194J-
Fees for except Individuals Payment, FTS (other than separately for ➢If sum is paid by Individual/HUF
Professional, & HUF individual whichever is earlier professional each item towards professional Services
Technical services, or HUF whose services) or mentioned (no exclusive for their personal
Royalty, Non- total sales, gross royalty where exemption limit purpose.
compete fees, receipts or such royalty is in for ➢It may be noted that since this
remuneration or turnover from the the nature of remuneration provision requires such
commission to business or consideration or fees of individuals/HUFs to deduct tax at
director. profession carried for sale, commission to source only in respect of fees for
on by him does distribution or director) professional services or fees for
not exceed Rs. 1 exhibition of technical services, it can be
crore in case of cinematographic inferred that individuals and HUFs
business and Rs. films are not required to deduct tax at
50 lakhs in case of source under section 194J on
profession during 10% in other royalty and non-compete fees.
the FY cases ➢TPAs liable to deduct tax under
immediately section 194J on payment to
preceding FY year hospitals on behalf of insurance
in which such companies
commission or ➢the transaction charges paid to BSE
brokerage is by its members are not for
credited or paid technical services but are in the
during preceding nature of payments made for
F.Y. facilities provided by the stock
exchange and therefore 194J not
applicable
➢provisions of tax deduction at
source under section 194J and
section 195 would be attracted in
respect of consideration for use or
right to use computer software
since the same falls within the
definition of royalty
➢CG has exempted certain software
payments from the applicability of
tax deduction under section 194J.
Accordingly, where payment is
made by the transferee for
acquisition of software from a
resident-transferor, the provisions
of section 194J would not be
attracted if -
➢ the software is acquired in a
subsequent transfer without
any modification by the
transferor;
 ➢ tax has been deducted
either under section 194J or
under section 195 on
payment for any previous
transfer of such software;
and
➢ the transferee obtains a
declaration from the
transferor that tax has been
so deducted along with the
PAN of the transferor.

194K: Income in Person Resident Payment/credit 10% Rs.5,000 No tax if the income is in nature of
respect of units responsible for [earlier] capital gains
paying income
194LA:Com- Any person Resident Payment 10% Rs.2.5 Lakhs p.a. ➢No TDS u/s 194LA, if the impugned
pensation/Enhanced immovable property is an
Compensation on ‘agricultural land’ as capital gains
compulsory arising on compulsory acquisition
acquisition of of an ‘agricultural land in urban
immoveable area’ is exempt u/s 10(37).
property ➢No tax is required to be deducted
where payment is made in respect
of any award or agreement which
has been exempted from levy of
income tax under section 96 of the
Right to Fair Compensation and
Transparency in Land Acquisition,
Rehabilitation and Resettlement
Act, 2013

194LB: Income by Infrastructure 1. Non- Credit or Payment, 5%(+)SC – ➢TDS deduction would be subject to
way of Interest Debt Fund resident (not whichever is earlier (+) EC the provisions of DTAA.
payable by referred u/s being
Infrastructure Debt 10(47) of the Act. Company)
fund 2. Foreign
Company
194LC: Indian Company NR (not being Credit or Payment, 5% (+)SC (+)EC – In respect of borrowing made in
Interest on Foreign or Company) whichever is earlier foreign currency from sources
Currency Business trust OR 4% if bond or outside India
Loan/Bond, paid by Foreign RDB listed in ➢ under a loan agreement at
Indian Company/ Company RSE on IFSC any time between 1.7.2012
Business trust and 30.6.2023 or
➢ by way of issue of long-term
infrastructure bonds during
the period between
1.7.2012 and 30.9.2014 or
➢ by way of issue of any long-
term bond, including long-
term infrastructure bond
during the period between
1.10.2014 and 30.6.2023
as approved by the Central
Government in this behalf.

In respect of monies borrowed by it

from a source outside India by way of
issue of rupee denominated bond on
or before 30.6.2023.

Levy of higher rate of TDS @20%

under section 206AA in the absence
of PAN would not be attracted in
respect of payment of interest on
long-term bonds, as referred to in
section 194LC, to a non-corporate
non-resident or to a foreign
company

194LD: Any Person FII or QFI Credit or Payment, 5%(+)SC (+)EC – [FII – Foreign Institutional Investor
Interest on Govt. Sec (Indian Company/ whichever is earlier QFI – Qualified Foreign Investor]
Or Govt. of India) Note: Rate of Interest shall not
Rupee denominated exceed the rate approved by CG.
bonds of Indian Co.
payable during the
period between
1.6.2013 and
30.6.2023
194M: Payment individual or a Resident Credit/Payment 5% Rs.50 Lakhs No requirement to obtain TAN
made by an HUF [earlier]
individual or a HUF responsible for
for contract work or paying any sum
by way of (other than those
commission or who are required
brokerage or fees for to deduct income-
professional services tax as per the
provisions of
section 194C or
194H or 194J)

(i) for
carrying out any
work (including
supply of labour
for carrying out
any work) in
pursuance of a
contract; or
(ii) by way of
commission (not
being insurance
commission
referred to in
section 194D) or
brokerage; or
(iii) by way of
fees for
professional
services.