Tax Deducted at Source (TDS) is a mechanism introduced by the Income Tax Department. Under this, the responsible person is supposed to deduct a certain percentage of the income as tax before making the payment to the beneficiary. Payment includes salary, commission, professional fees, interest, rent, etc. This article discusses on TCS Rate Chart for F.Y 2022-2023.
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What is TDS?
TDS or tax deducted at source is the income tax deducted from the money paid at the time of making specific payments like rent, commission, professional fees, salary, interest, etc. by the persons making such payments.
Every person who makes certain payments specified in the Income Tax Act is liable to deduct TDS at the time of making such specified payments.
TCS Rate Chart for F.Y 2022-2023
| Section | Collection Code | Nature of Payment | Threshold Amount | TCS Rates | |
| FY 2022-2023 | |||||
| Individual/HUF | Other | ||||
| 206C | A | Alcoholic Liquor for human consumption | – | 1 | 1 |
| 206C | B | Timber obtained under a forest lease | – | 2.5 | 2.5 |
| 206C | C | Timber obtained by any other mode | – | 2.5 | 2.5 |
| 206C | D | Any other forest produce not being a timber or tendu leaves | – | 2.5 | 2.5 |
| 206C | E | Scrap | – | 1 | 1 |
| 206C | F | Grant of a license, lease, etc. of the Parking lot | – | 2 | 2 |
| 206C | G | Grant of a license, lease, etc. of Toll Plaza | – | 2 | 2 |
| 206C | H | Grant of Mining and quarrying | – | 2 | 2 |
| 206C | I | Tendu leaves | – | 5 | 5 |
| 206C | J | Minerals, being coal or lignite, or iron ore (Applicable from F.Y. 2012-13 onwards) | – | 1 | 1 |
| 206C | K | TCS on sale of Bullion (Applicable from F.Y. 2012-13 to 2016-17) | Over Rs. 200000 | 1 | 1 |
| 206C | L | TCS on Motor Vehicle (Applicable from F.Y. 2016-17 onwards) | Over Rs. 100000 | 1 | 1 |
| 206C | M | TCS on sale in cash of any goods (other than bullion/jewelry) (Applicable for F.Y. 2016-17 ) | Over Rs. 200000 | 1 | 1 |
| 206C | N | TCS on providing any services (other than Ch-XVII-B) (Applicable for F.Y. 2016-17) | Over Rs. 200000 | 1 | 1 |
| 206C | O | TCS on remittance under LRS for purchase of overseas tour program package (Applicable from F.Y. 2020-21 onwards) | – | 5 | 5 |
| 206C | P | TCS on remittance under LRS for an educational loan taken from a financial institution mentioned in section 80E (Applicable from F.Y. 2020-21 onwards) | – | 0.5 | 0.5 |
| 206C | Q | TCS on remittance under LRS for purposes other than for the purchase of overseas tour package or educational loan taken from a financial institution (Applicable from F.Y. 2020-21 onwards) | Over Rs. 700000 | 5 | 5 |
| 206C | R | TCS on sale of goods (Applicable from F.Y. 2020-21 onwards) | – | 0.1 | 0.1 |
Note: As per section 206AA, in case of non-supply of PAN/Aadhaar by the deductor, TDS will be charged at the normal rate or 20% (5% in case of section 194-O), whichever is higher.
Note: Under new section 206AB, where deduction of tax at source is claimed under the provisions of Chapter XVIIB on any amount or income or the amount paid or payable or credited, other than section 192, 192A, 194B, 194BB, 194LBC or 194N, by a person to a specified person, tax withheld at the higher of the following rates.
- Double the rate specified in the relevant provision of the law; or
- Double the applicable rate or rates; or
- A rate of five percent.
Note: The provisions of Section 206AA (Failure to furnish PAN/Aadhaar) will prevail over the provisions of Section 206AB and thereafter tax will be deducted at the higher of the two rates mentioned in Section 206AA and Section 206AB.
What are the responsibilities of a person who deducts tax at source (TDS)?
Below are the basic responsibilities of a person who is liable to deduct TDS.
- Get Tax Deduction Account Number (TAN) and mention the same in all TDS documents.
- Deduct TDS at the applicable rate.
- Deposit the withheld tax into the government account (within the specified due dates).
- Periodically TDS statements filing i.e. TDS returns (within specified due date) regularly.
- Issue a TDS certificate (Form 16 or Form 16A) to the beneficiary in respect of the TDS deducted by him (within the prescribed due dates).
Interest on late payment and late deduction of TDS
As per Section 201(1A), late deduction shall attract interest at the rate of 1% per month or part of a month on the amount of TDS from the date of deduction of tax to the date of actual deduction of tax.
Also for late payment, interest at the rate of 1.5% per month or part of a month will be charged on the amount of TDS from the date of deduction of tax to the date of payment of such tax.
Charges for late filing of TDS/TCS return
Fees are payable at Rs. 200 per day for each day during which the breakdown continues. The number of charges must not exceed the amount of TDS.
Should TDS be deducted while paying to Govt?
No person should deduct any tax from any amount payable –
- government, or
- Reserve Bank of India (RBI), or
- a company established under a central law whose income is exempt from income tax, or
- A mutual fund specified under sub-section (23D) of section 10, where an amount is payable to it as interest or dividend in respect of any shares/securities held or in which the said mutual funds have a full beneficial interest, or any other income, which are added to it or arise.
Final words
Deduction of tax at source (TDS) means the collection of tax on income in the form of salary, rent, sale of property, dividends, etc. by requiring the payer to collect the income tax due on such income when credited/paid in benefit of the recipient and depositing the same with the Government on behalf of the recipient.
