B.B.A.

: V SEMESTER
BBA-N503: INCOME TAX
SANTOSH KUMAR
ASSISTANT PROFESSOR
 Unit – 4

Tax Deducted at Source (TDS)

Tax Deducted at Source (TDS) is a mechanism that has been introduced by the Income Tax
Department. Under this, the responsible person is supposed to deduct a certain percentage of income
as tax before making the payment to the receiver. The payment includes salary, commission,
professional fees, interest, rent, etc.
In other words, TDS or Tax Deducted at Source is income tax reduced from the money paid at the
time of making specified payments such as rent, commission, professional fees, salary, interest
etc. by the persons making such payments.
Usually, the person receiving income is liable to pay income tax. But the government with the help
of Tax Deducted at Source provisions makes sure that income tax is deducted in advance from the
payments being made by you.
The recipient of income receives the net amount (after reducing TDS). The recipient will add the
gross amount to his income and the amount of TDS is adjusted against his final tax liability. The
recipient takes credit of the amount already deducted and paid on his behalf.

TDS Rate Chart for Financial Year 2019-20/Assessment Year 2020-21

Sl. Nature of Section Basic Cut- TDS rate for

No. Payment off (Rs.)
p.a. Individual Other If PAN is not
and HUF than submitted/ Invalid
Individual/ PAN
HUF

1 Payment of 192 Slab rate Slab rate Not 30%

Salaries by applicable
Employers

2 Premature 192A 50,000.00 10% Not 20%

payment by PF applicable
Organization
from EPF A/c
(i.e. before 5
Years).

3 Payment of 193 10,000.00 10% 10% 20%

Interest on
Securities by
company.

BBA-N503: INCOME TAX

4 Payment of 194 2,500.00 10% 10% 20%
Dividend other
than dividend
as referred to
Section 115O
by company
(i.e. Dividend
on which
Dividend
Distribution
Tax is not paid)

5 Payment of 194A 40,000.00 10% 10% 20%

Interest by (Non
bank Sr.Citizen)
50,000.00
(Sr.
Citizen)

Payment of 194A 5,000.00 10% 10% 20%

6 Interest by
others

7 Payment of 194B 10,000.00 30% 30% 30%

prize from
Wining from
Lotteries by
any person.

8 Payment of 194B 10,000.00 30% 30% 30%

prize from
Wining from
Horse Race by
any person.

9 Payment to 194C 30,000.00 1% 2% 20%

Contractors by (Single bill)
any person. or 1 Lakh
aggregate
bills during
the year.

10 Payment to 194C • 0 0 20%

Transporter
Covered u/s.
44E and
submit
declaration in
prescribed
format. (i.e.
owning less

BBA-N503: INCOME TAX

 than 10 goods
carriages)

11 Payment to 194C 30,000.00 1% 2% 20%

Transporter not (Single bill
covered u/s. ) or
44E 75,000.00
(i.e. owning aggregate
more than 10 bills during
goods the year.
carriages)

Payment of 194D 15,000.00 5% 10% 20%

12 Insurance
Commission to
agents by
Insurance
Company.

13 Payment in 194DA 1 Lakh 1% 1% 20%

respect of
maturity of Life
Insurance
Policy by Life
Insurance
Company.

14 Payment to 194E • 20% 20% 20%

NRI sportsman
or association
by any person
or organization

15 Payment out of 194EE 2,500.00 10% 10% 20%

deposit under
National
Saving
Scheme (NSS)

16 Payment with 194F • 20% 20% 20%

respect to
repurchase of
units by Mutual
Fund
Companies.

17 Payment of 194G 15,000.00 5% 5% 20%

Lottery
Commission

BBA-N503: INCOME TAX

18 Payment of 194H 15,000.00 5% 5% 20%
commission or
Brokerage

Payment of 194I 240,000.00 10% 10% 20%

19 rent on land,
building,
furniture and
fittings.

20 Payment of 194I 240,000.00 2% 2% 20%

rent on plant,
machinery or
equipments.

21 Payment made 194IA 50 Lakh 1% 1% 20%

on account of
transfer
of immovable
property other
than agriculture
land.

22 Rent payable 194IB 50,000.00 5% 5% 20%

by individual PM
not covered
u/s. 194I for
land, building,
furniture and
fittings

Payment of
23 Professional 194J 30,000.00 10% 10% 20%
Fees other
than call
centers

24 Payment of 194J 30,000.00 2% 2% 20%

Professional
Fees to call
centers.

Compensation
on transfer of
25 certain 194LA 250,000.00 10% 10% 20%
immoveable
property than
Agriculture
Land

BBA-N503: INCOME TAX

 How and When to file TDS returns?
Filing Tax Deducted at Source returns is mandatory for all the persons who have deducted TDS.
TDS return is to be submitted quarterly and various details need to be furnished like TAN,
amount of TDS deducted type of payment, PAN of deductee, etc. Also, different forms are
prescribed for filing returns depending upon the purpose of the deduction of TDS. Various types
of return forms are as follows:
Form 26QTDS on all payments except salaries
Q1 – 31st July
Q2 – 31st October
Q3 – 31st January
Q4 – 31st May

Form No Transactions reported in the return Due date

Form TDS on Salary Q1 – 31st July

24Q
Q2 – 31st October
Q3 – 31st January
Q4 – 31st May

Form TDS on all payments made to non-residents Q1 – 31st July

27Q except salaries Q2 – 31st October
Q3 – 31st January
Q4 – 31st May

Form TDS on sale of property 30 days from the end of the month in which
26QB TDS is deducted

Form TDS on rent 30 days from the end of the month in which
26QC TDS is deducted

Tax De ducted at Source has to be deposited using Challan ITNS-281 on the government portal.

BBA-N503: INCOME TAX

References:
 Mehrotra, H.C., & Goyal, S.P., ‘Income Tax Law and Accounts’, Sahitya Bhawan Publications,
60th Edition (2019).
 Jain, P.K. & Tyagi, R.K., ‘Income Tax Law and Accounts’, SBPD Publication House,10 th
Edition (2019)

BBA-N503: INCOME TAX