WIDENING OF TAX BASE: TDS

TAX DEDUCTION AT SOURCE (TDS)

The Income Tax Act contains provisions to collect tax at source on accrual of income in case of payments such as salary, interest, commission, winnings from any lottery or / cross word puzzle, professional fee etc. if payment exceeds the specified threshold limit.

Under this scheme, persons responsible for making payment of income are responsible to deduct tax at specified rates & deposit the same with Government treasury within stipulated period.

Government has revised the threshold limits for TDS from time to time keeping in mind the general tax rates.

Further, its scope has been widened e.g. inclusion of winnings from card games and other games of any sort under Section 194 B with effect from June 1, 2001.

Finance Act, 2010 revised the threshold limits under various  Sections w.e.f. July 1, 2010 as shown in the below Table.  This upward revision is justified as income tax rates have been lowered.

THRESHOLD LIMITS FOR TDS..

Nature of payment	Sec.	Old limit	Revised limit
Winnings from lottery or crossword puzzle	194 B	Rs. 5,000	Rs. 10,000
Winnings from horse races	194 B	Rs. 2,500	Rs. 5,000
Payment to contractors	194 C	Rs. 20,000	Rs. 30,000
Insurance commission	194 D	Rs. 5,000	Rs. 20,000
Brokerage commission	194 H	Rs. 2,500	Rs. 5,000
Rent	194 I	Rs. 1,20,000	Rs. 1,80,000
Fees for professional or technical services	194 J	Rs. 20,000	Rs. 30,000

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