Draft for discussion purposes

TDS rates applicable for amounts credited / payments made during the financial year ending March 31, 2009 For the period 01/04/2008 to 31/03/2009 Category Rate (%) Surcharge (%) Cess (%) Effective rate (%) Definition

Salary (Section 192)* Individuals (Income lesser than/ equal to Rs 1,000,000) Individuals (Income greater than Rs 1,000,000) * The basic rate of 30% applies for annual income exceeding Rs. 5,00,000. The tax payable for income below Rs 5,00,000 is as per slabs provided Rent (Section 194I) [Threshold amount is Rs 120,000 in a financial year] Individuals (Income lesser than/ equal to Rs 1,000,000) Individuals (Income greater than Rs 1,000,000) Local authority, co-operative societies Companies, firms (Income lesser than/ equal to Rs 10,000,000) Companies, firms (Income greater than Rs 10,000,000) & artificial judicial person not falling in any other category Incase of rent for use of 'any machinery or plant or equipment' Individuals (Income lesser than/ equal to Rs 1,000,000) Individuals (Income greater than Rs 1,000,000) Local authority, co-operative societies Companies, firms (Income lesser than/ equal to Rs 10,000,000) Companies, firms (Income greater than Rs 10,000,000) & artificial judicial person not falling in any other category Professional Services/ Technical Services (Section 194J) [Threshold amount is Rs 20,000 in a financial year] Individuals (Income lesser than/ equal to Rs 1,000,000) Individuals (Income greater than Rs 1,000,000) Local authority, co-operative societies Companies, firms (Income lesser than/ equal to Rs 10,000,000) Companies, firms (Income greater than Rs 10,000,000) & artificial judicial person not falling in any other category

30 30

10

3 3

30.900 33.990

15 15 15 20 20

10 10

3 3 3 3 3

15.450 16.995 15.450 20.600 22.660

As per section 194-I, “rent” means any payment, by whatever name called, under any lease, sublease, tenancy or any other agreement or arrangement for the use of (either separately or together) any, land; or building (including factory building); or land appurtenant to a building (including factory building); or machinery; or plant; or equipment; or furniture; or fittings, whether or not any or all of the above are owned by the payee

10 10 10 10 10

10 10

3 3 3 3 3

10.300 11.330 10.300 10.300 11.330

As per finance Act 2007, rent payable on use of plant & machinery or equipment will attract a lower rate of 10% with effect from June 1, 2007

10 10 10 10 10

10 10

3 3 3 3 3

10.300 11.330 10.300 10.300 11.330

As per section. 194J, "professional services" means services rendered by a person in the course of carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or advertising "fees for technical services" shall have the same meaning as in Explanation 2 to clause (vii) of sub-section (1) of section 9. S. 9(1)(vii) "fees for technical services" means any consideration (including any lump sum consideration) for the rendering of any managerial, technical or consultancy services (including the provision of services of technical or other personnel) but does not include consideration for any construction, assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head "Salaries". " Royalty" means consideration (including any lum sum consideration but excluding any consideration which would be the income of the recipient chargeable under the head 'Capital gain') for: transfer of all or any right (including the granting of a license) in respect of a patent, invention, (i) the model, design, secret formula or process or trade mark or similar property; (ii) the imparting of any information concerning the working of, or use of, a patent, invention, model, design, secret formula or process or trade mark or similar property; (iii) the use of any patent, invention, model, design, secret formula or process or trade mark or similar property;
(iv) the

imparting of any information concerning technical, industrial, commercial or scientific knowledge, experience or skill; (iva) the use or right to use any industrial, commercial or scientific equipment (v) the transfer of all rights or any rights (including the granting of a licence) in respect of any copyright, literary, artistic or scientific work including films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting, but not including consideration for the sale, distribution or exhibition of cinematographic films (vi) the rendering of any services in connection with the activities referred to in sub-clauses (i) to (v) above. " any sum referred in clause (va) of section 28 of the Income-tax Act" means any sum whether paid or payable, in cash or kind, under an agreement for: (a) not carrying out any activity in relation to any business ; or (b) not sharing any know-how, patent, copyright, trade mark, licence, franchise or any other business or commercial right of similar nature or information or technique likely to assist in the manufacture or processing of goods or provisions for services However, any sum chargeable under the head capital gains would not be covered in the above definition.

Subject to partner's review

For the period 01/04/2008 to 31/03/2009 Category Contractual payments (Section 194C) [TDS applicable where amount paid/ credited to a contractor exceeds Rs 20,000 in a single instance. Additionally, TDS also applicable if aggregate sums paid/ credited in a financial year to contractors exceed Rs 50,000, even if individual contracts does not exceed Rs 20,000] Individuals (Income lesser than/ equal to Rs 1,000,000) Individual (Income greater than Rs 1,000,000) Local authority, co-operative societies Companies, firms (Income lesser than/ equal to Rs 10,000,000) Companies, firms (Income greater than Rs 10,000,000) & artificial judicial person not falling in any other category Payments pursuant to advertising contracts and Sub-contractual payments (Section 194C) [TDS applicable where amount paid/ credited to a contractor/ sub contractor exceeds Rs 20,000 in a single instance. Additionally, TDS also applicable if aggregate sums paid/ credited in a financial year to contractors/ sub- contractors exceed Rs 50,000, even if individual contracts does not exceed Rs 20,000] Individuals (Income lesser than/ equal to Rs 1,000,000) Individual (Income greater than Rs 1,000,000) Local authority, co-operative societies Companies, firms (Income lesser than/ equal to Rs 10,000,000) Companies, firms (Income greater than Rs 10,000,000) & artificial judicial person not falling in any other category 1 1 1 1 1 10 10 3 3 3 3 3 1.030 1.133 1.030 1.030 1.133 2 2 2 2 2 10 10 3 3 3 3 3 2.060 2.266 2.060 2.060 2.266 Rate (%) Surcharge (%) Cess (%) Effective rate (%) Definition As per section 194C, any person paying any sum to a resident for carrying out any 'work' (including supply of labour for carrying out any work) in pursuance of contract. The expression work shall also include - a) advertising, b) broadcasting and telecasting c) carriage of goods and passengers by any mode of transport other than by railways; d) catering

Draft for discussion purposes

Interest other than interest on securities (Section 194A) [Threshold amount is Rs 5,000 in a financial year] Individuals (Income lesser than/ equal to Rs 1,000,000) Individuals (Income greater than Rs 1,000,000) Local authority, co-operative societies Companies, firms (Income lesser than/ equal to Rs 10,000,000) Companies, firms (Income greater than Rs 10,000,000) & artificial judicial person not falling in any other category 10 10 10 20 20 10 10 3 3 3 3 3 10.300 11.330 10.300 20.600 22.660

As per section 194A, any person paying interest other than interest on securities shall be liable to deduct TDS. However, this provision shall not apply to income credited / paid to any banking company to which Banking Regulation Act, 1949 applies, financial corporation established by or under a Central, State or Provincial Act, LIC, and such other entities

Commission / brokerage (Section 194H) [Threshold amount is Rs 2,500 in a financial year] Individuals (Income lesser than/ equal to Rs 1,000,000) Individuals (Income greater than Rs 1,000,000) Local authority, co-operative societies Companies, firms (Income lesser than/ equal to Rs 10,000,000) Companies, firms (Income greater than Rs 10,000,000) & artificial judicial person not falling in any other category 10 10 10 10 10 10 10 3 3 3 3 3 10.300 11.330 10.300 10.300 11.330

As per S. 194H, commission or brokerage" includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person for services rendered (not being professional services) or for any services in the course of buying or selling of goods or in relation to any transaction relating to any asset, valuable article or thing, not being securities;

Notes: - The list of items covered under each section is only an illustrative list. In case of any doubt, we could have a call to discuss TDS implications. - Special rates of TDS apply on payments to non-residents taking into account the provisions of the Act and the applicable tax treaty

Subject to partner's review