CBDT reduces TDS/TCS rates for non-salaried payments

Central Board of Direct Taxes vide a press release dated 13th May 2020 has announced reduction in rate of Tax Deduction at Source(TDS) and Tax Collection at Source(TCS) for non-salaried person to provide more money in the hands of taxpayers to deal with the economic situation arising out of COVID-19 pandemic. These relaxations are effective for the payments made from 14th May,2020 to 31st March,2021. However, there shall be no reduction in rates of TDS or TCS, where the tax is required to be deducted or collected at higher rate due to non-furnishing of PAN/Aadhaar. The new reduced rates of TDS as per the press release are as follows-

Nature of Payment  Existing rate of TDS  Reduced rate of TDS  
Interest on Securities10%7.5%
Dividend10%7.5%
Interest other than Interest on Securities10%7.5%
Payment of Contractors and subcontractors1%(HUF) 2%(Others)0.75%(HUF) 1.5%(Others)
Insurance Commission5%3.75%
Payment in respect of Life insurance policy5%3.75%
Payments in respect of  Deposits under National Savings Scheme10%7.5%
Payments on account  Of re-purchase of Units By Mutual Funds or UTI20%15%
Commission, prize etc., On sale of lottery tickets5%3.75%
Commission or Brokerage5%3.75%
Rent for plant and machinery2%1.5%
Rent for immovable property10%7.5%
Payment for acquisition Of immovable property1%0.75%
Payment of rent by individual or HUF5%3.75%
Payment for Joint Development Agreements10%7.5%
Fee for Professional or Technical Services (FTS),Royalty, etc2% (FTS, certain royalties, call centre) 10%(others)1.5% (FTS, certain royalties, call centre) 7.5%(others)
Payment of dividend by Mutual Funds10%7.5%
Payment of Compensation on Acquisition of Immovable property10%7.5%
Payment of income by Business trust10%7.5%
Payment of income by Investment fund10%7.5%
Income by Securitization trust25% (Individual/HUF) 30%(Others18.75% (Individual/HUF) 22.5%(Others
Payment to commission, brokerage  etc. by Individual and HUF5%3.75%
TDS one-commerce participants1%0.75%

The new reduced rates of TCS as per the press release are as follows-

Nature of Receipts  Existing rate of TCS  Reduced rate of TCS  
Sale of Tendu Leave5%3.75%
Sale of Timber obtained under a Forest lease2.5%1.875%
Sale of Timber obtained by any other  mode2.5%1.875%
Sale of any other forest produce not being timber/tendu leaves2.5%1.875%
Sale of scrap and Minerals, being coal or lignite or iron ore1%0.75%
Grant of license, lease, etc. of Parking lot, toll plaza, mining and quarrying2%1.5%
Sale of motor vehicle above 10 lakhs1%0.75%
Sale of any other goods0.1%0.75%
   

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