[By Shaleen Shah (Partner), VNCA]
Finance Act 2021, has introduced a new section 206AB effective from 1-Jul-2021 wherein a payer/buyer is responsible to deduct TDS at higher rate (i.e. twice the rate as specified under the relevant provision of the Income Tax Act or twice the rate/ rates in force; or at the rate of 5% whichever is higher) from the payee/seller/vendor in the following stipulated situation*:
Note:
Illustrative Table of TDS Rates for FY 2021-22
Section | Nature of Payment | Normal rate | Vendor/ Payee has PAN, Linked PAN with Aadhaar but has not filed Return as per stipulated situation* | Vendor/ Payee does not have PAN or has not linked PAN with Aadhaar |
---|---|---|---|---|
192 | Salary | as per slabs | N.A. (as per slabs) | 20% or as per higher slab |
193 | Interest on securities | 10 | 20 | 20 |
194 | Income by way of dividend | 10 | 20 | 20 |
194A | Income by way of interest other than ‘Interest on securities’ | 10 | 20 | 20 |
194C | Payment to contractor/sub-contractor | |||
a) HUF/Individuals | 1 | 5 | 20 | |
b) Others | 2 | 5 | 20 | |
194H | Commission or brokerage | 5 | 10 | 20 |
194-I | Rent | |||
a) Plant & Machinery | 2 | 5 | 20 | |
b) Land or building or furniture or fitting | 10 | 20 | 20 | |
194-IA | Payment on transfer of certain immovable property other than agricultural land | 1 | 5 | 20 |
194J | Fees for professional or technical services: | |||
a) sum paid or payable towards fees for technical services | 2 | 5 | 20 | |
b) Any other sum | 10 | 20 | 20 | |
194M | Payment by certain Individuals/HUF to contractor, professional or payment by way of commission or brokerage above Rs.50 Lacs | 5 | 10 | 20 |
194Q | Payment to resident for purchase of goods of the aggregate value exceeding Rs. 50 lakhs | 0.1 | 5 | 5 |
Action Point:
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