TDS Rate Chart with Section List for FY 2021-22 (AY 2022-23)

Tax Deducted at Source (TDS) is a crucial aspect of the Indian taxation system. It involves deducting a certain percentage of tax from the payment made to a person and depositing it with the government on their behalf. The TDS rates and thresholds are subject to change every financial year, and it's essential to stay updated with the most recent developments to avoid any penalties or interest charges.

We will dive into the TDS chart rate for FY 2021-22 (AY 2022-23) and discuss the key changes and updates that taxpayers need to be aware of. This page will provide you with a comprehensive guide to TDS rates for the financial year 2021-22.

Note: Here is the latest TDS Rate Chart for FY 2023-24 AY (2024-25).

What is TDS?

TDS stands for Tax Deducted at Source. It is a tax collection mechanism where a person (called the deduct or) deducts a certain percentage of tax from the payment made to another person (called the deducted) and deposits it with the government on their behalf. This mechanism is mainly used to ensure that taxpayers pay their taxes in a timely and efficient manner.

For detailed discussion on TDS, please visit: https://www.hostbooks.com/in/blog/tds/complete-guide-tax-deducted-source-tds/

What is TDS Rate Chart?

TDS Rate Chart is a schedule that displays the various TDS rates applicable to different types of payments.

As the rate of deduction differentiates based on income type and deductee. These rates are determined by the Income tax department at the discretion of the finance minister. A detailed TDS rate chart is rolled out by the Income tax department with the latest changes.

TDS Rate chart contains the following.

TDS section list
Nature of payment
Threshold limit
Rate for Residents
Rate for Non Residents

Now, let's have a look at the TDS Rates applicable for financial year 2021-22 as per Finance Bill 2021 presented by Finance Minister Smt. Nirmala Sitharaman dated on 1st February, 2021:

Here is the TDS Rate Chart for Financial year 21-22 along with TDS section list which provides a comprehensive overview of the TDS rates applicable for different types of payments.

TDS Rate Chart for F.Y. 2021-22 (A.Y: 2022-23)

Section	Nature of payment	Threshold Limit Rs.	Applicable from 01/04/2021 to 31/03/2022
			Resident	Non-resident *
		Rs.	TDS Rate (%)	TDS Rate (%)
192	Salaries	-	Normal slab rate	Normal slab rate
192A	Premature withdrawal from EPF	50000	10	10
193	Interest on securities - 8% Savings (Taxable) Bonds, 2003 or 7.75% Savings (Taxable) Bonds, 2018 during the financial year	10000	10	-
193	Interest on securities - Interest on securities for money issued by or on behalf of any local authority/statutory corporation, listed debentures of a company(other than demat form), any other interest on securities	5000	10	-
194	Dividends	5000	10	-
194A	Interest (Banking co., co-operative society engaged in banking, post office)	40000	10	-
194A	Interest (Any other person)	5000	10	-
194B	Winning from lotteries	10000	30	30
194BB	Winning from Horse race	10000	30	30
194C	Contractor-Single transaction-Individual/HUF -Others	30000	1 2	- -
194C	Contractor - Consolidated Payment During the F.Y - Individual/HUF - Others	100000	1 2	- -
194D	Insurance commission - Other than Company - Company	15000	5 10	- -
194DA	Maturity of Life insurance policy	100000	5	-
194E	Non-resident sportsmen or sports association	-	-	20
194EE	NSS	2500	10	10
194F	Repurchase units by MFs	-	20	20
194G	Commission-Lottery	15000	5	5
194H	Commission/Brokerage	15000	5	-
194I	Rent of - Plant/Machinery /Equipment - Land and Building/Furniture & Fixture	240000	2 10	- -
194IA	Transfer of certain immovable property other than agriculture land	50 lakh	1	-
194IB	Rent by Individual/HUF	50000 per month	5	-
194IC	Payment under Joint Development Agreements to Individual/HUF	-	10	-
194J	Professional Fees	30000	10	-
194J	Technical Fees (w.e.f. 01.04.2020)	30000	2	-
194J	Payment to call centre operator (w.e.f. 01.06.2017)	30000	2	-
194J	Director's fees	-	10	-
194K	Payment of any income in respect of (a) units of a mutual fund as per section 10(23D); or (b) the units from the administrator; or (c) units from specified company (w.e.f. 01.04.2020)	5000	10	-
194LA	Compensation on transfer of certain immovable property other than agriculture land (TDS exempted if covered under RFCTLARR Act w.e.f. 01.04.2017)	250000	10	-
194LB	Income by way of interest from infrastructure debt fund	-	-	5
194LBA	Income from units of business trust -interest received or receivable from a special purpose vehicle; or - dividend referred to in sub-section (7) of section 115-O	-	10 10	5 10
194LBA	Distribution of rental income to unit holders - Other than Company - Company	-	10 10	30 40
194LBB	Income in respect of units of investment fund - Other than Company - Company	-	10 10	30 40
194LBC	Income in respect of investment in securitization fund - Individual/HUF - Company - Other Person	-	25 30 30	30 40 30
194LC	Income by way of interest by an Indian specified company to a non-resident/foreign company on foreign currency approved loan / long-term infrastructure bonds from outside India	-	-	5
194LC	Income by way of interest by an Indian specified company on rupee denominated bond / any long-term bonds from outside India, which is listed only on a recognized stock exchange located in any International Financial Services Centre	-	-	4
194LD	Interest on certain bonds from Govt. securities	-	-	5
194M	Certain payments by Individual/HUF	50 lakh	5	-
194N	Payment of certain amount in cash	1 Crore	2	2
194N	Payment of certain amount in cash (first proviso of section 194N)if- - Amount is more than Rs.20 lakh but up to Rs. 1 crore - Amount exceeds Rs. 1 crore		2 5	2 5
194-O	Applicable for e-commerce operator for the sale of goods or provision of services facilitated by it through its digital or electronic facility or platform (w.e.f. 01.04.2020)	-	1	-
194-P	Deduction of tax in case of specified senior citizen. [Change will applicable from 1st April, 2021.]	-	Applicable rates in force	-
194-Q	Payment of certain sum by the buyer to the seller (resident Indian) for purchase of goods [Change will applicable from 1st July, 2021.]	50 lakh	0.1	-
195	Income of Investment made by an NRI	-	-	20
195	Long-term capital gain - Under Section - 115E/112(1)(c)(iii)/112A - Any Other Gains	-	- -	10 20
195	Short-term capital gain - 111A	-	-	15
195	Royalty	-	-	10
195	Fees for technical services	-	-	10
195	Interest income payable by Govt./Indian concern (other than section 194LB or 194LC)	-	-	20
195	Any Other Income - Other than Company - Company	-	- -	30 40
196A	Income in respect - - of units of a Mutual Fund specified under clause (23D) of section 10; or - from the specified company referred to in the Explanation to clause (35) of section 10	-	-	20
196B	Income from units to an offshore fund	-	-	10
196C	Income from foreign currency bonds or GDR of an Indian company	-	-	10
196D	Income of foreign Institutional Investors from securities (not being dividend or capital gain)	-	-	20

* TDS rate shall be increased by applicable surcharge and Health & Education Cess.

Note: As per section 206AA, In case of non-furnishing of PAN/Aadhaar by deductee, TDS will be charged at normal rate or 20% (5% in case of section 194-O), whichever is higher.

Note: As per new section 206AB, where tax is required to be deducted at source under the provisions of Chapter XVIIB, on any sum or income or amount paid, or payable or credited, other than sections 192, 192A, 194B, 194BB, 194LBC or 194N by a person to a specified person, the tax shall be deducted at the higher of the following rates.

Twice the rate specified in the relevant provision of the Act; or
Twice the rate or rates in force; or
The rate of five per cent.

Note: Provision of section 206AA (Non furnishing of PAN/Aadhaar) shall be override on the provision of section 206AB and then tax shall be deducted at higher of the two rates provided in section 206AA and in section 206AB.

[These change will be applicable from 1st July, 2021.]

The TDS rate chart above is referenced from

https://incometaxindia.gov.in/charts%20%20tables/tds%20rates.htm

Working Mechanism of TDS

Let's understand the TDS mechanism with an Example.

Suppose Mr. A is an employer who pays a salary of Rs. 50,000 per month to Mr. B. As per the income tax laws, Mr. A needs to deduct TDS on the salary paid to Mr. B before making the payment. Let's assume the TDS rate on salary is 10%. So, Mr. A will deduct Rs. 5,000 (10% of Rs. 50,000) as TDS and pay Rs. 45,000 (Rs. 50,000 - Rs. 5,000) to Mr. B as his net salary.

The deducted TDS amount will be deposited by Mr. A with the government within a specified time period. Later, Mr. B can claim this TDS amount as a credit while filing his income tax return. The TDS mechanism is applicable to various payments such as salary, interest, rent, commission, professional fees, and many more.

All in All

TDS Deduction Chart for FY 2021-22 (AY 2022-23) is a crucial reference guide for taxpayers to ensure timely and accurate TDS deductions. It is essential to stay updated with the latest changes in TDS rates and thresholds to avoid any non-compliance penalties or interest charges.

Furthermore, you can also refer to the previous year's TDS Rate Chart to compare the changes and stay informed. Always consult a tax professional for any clarifications or further guidance related to TDS deductions.