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Friday, May 20, 2016

Amendment in TDS Rates & Threshold limit wef 01.06.2016

Under the scheme of deduction of tax at source as provided in the Act, every person responsible for payment of any specified sum to any person is required to deduct tax at source at the prescribed rate and deposit it with the Central Government within specified time. However, no deduction is required to be made if the payments do not exceed prescribed threshold limit.

In order to rationalise the rates and base for TDS provisions, the existing threshold limit for deduction of tax at source and the rates of deduction of tax at source are proposed to be revised as mentioned in table 3 and table 4 respectively.

Table 3: Increase in threshold limit of deduction of tax at source on various payments mentioned in the relevant sections of the Act -  

Section 192A is referred by the EPF dept while calculating the tax at the time of EPF withdrawal in regards to such employee who have not having Pan card & not submitted form No 15-G  also there are some state where in minimum wages are low & the contribution is deducted & the amount of  is less then 50000 where in service is less then 2 years or three years  it is good news for EPF subscriber 
Present SectionHeadsExisting Threshold
Limit (Rs.)
Proposed Threshold Limit
(Rs.)
192APayment of accumulated balance due to an employee30,00050,000
194BBWinnings from Horse Race5,00010,000
194CPayments to ContractorsAggregate annual limit of 75,000Aggregate annual limit of 1,00,000
194LAPayment of Compensation on acquisition of certain Immovable Property2,00,0002,50,000
194DInsurance commission20,00015,000
194GCommission on sale of lottery tickets1,00015,000
194HCommission or brokerage5,00015,000
Table-4 : Revision in rates of deduction of tax at source on various payments mentioned in the relevant sections of the Act:
Present SectionHeadsExisting Rate
of TDS (%)
Proposed Rate of
TDS (%)
194DAPayment in respect of Life Insurance Policy2%1%
194EEPayments in respect of NSS Deposits20%10%
194DInsurance commissionRate in force (10%)5%
194GCommission on sale of lottery tickets10%5%
194HCommission or brokerage10%5%
The following provisions which are not in operation are proposed to be omitted as detailed in Table 5.
Table 5: Certain non-operational provisions to be omitted
Present SectionHeadsProposal
194KIncome in respect of UnitsTo be omitted w.e.f 01 .06.2016
194LPayment of Compensation on acquisition of Capital AssetTo be omitted w.e.f 01 .06.2016
These amendments will take effect from 1st June, 2016.

@courtesy http://taxguru.in/income-tax/
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