CBDT Reduced 25% TDS and TCS Rates on 23 Items

CBDT recently released notification and said that TDS rates on 23 items have been reduced, It also released the revised TDS and TCS rates which will be applicable from yesterday throughout the current FY i.e. till 31st March 2021.

It happens by following the recent announcement made by finance minister Nirmala Sitharaman, in response to it, the IT department has reduced rates by 25% of tax deducted at source on rent, insurance policy, payment of dividend, professional fee, acquisition of immovable property, etc. This will be applicable throughout the ongoing financial year i.e. 2020-2021.

Read Also: Section 194I, 194IB & 194IC for TDS Under Income Tax Act Know everything about TDS section 194I, 194IB & 194IC that are related to rent under the income tax. Also, we covered some special points under section 194I. Read more

In the Notification CBDT stated that TCS on sale of motor vehicles having a price more than ₹10 lakh has been cut from 1% to 0.75%, along with it, TDS rates have been also reduced on 23  other items.

As per the notification, TDS on insurance premium payment has been reduced from 5% to 3.75%. TDS on Dividend and interest and rent for immovable property has been reduced from 10% to 7.5%. Additionally, there was a 1% TDS charge applicable on payment for the acquisition of immovable property which is now reduced to 0.75%. Payment of rent by individual or HUF has been also reduced to 3.75% which was 5% earlier. 

Moreover,  tax deducted at source (TDS) on e-commerce participants is now 0.75% which was earlier 1 percent. TDS on professional fee Know about section 194J under TDS for technical and professional services fees. Also, check amendments of TDS section 194J due to finance bill 2020 with general queries. Read more is also deduced from 2% to 1.5%.  Payment deposited under the National Savings Scheme will now attract  7.5% TDS compared to 10%. Additionally, Payments made for the repurchase of units by Mutual Funds will attract 15% TDS compared to 20% TDS which was the earlier rate. Insurance commission and brokerage benefited with a new TDS rate of 3.75% which was 5% earlier. Similarly, dividends by the mutual fund will attract 7.5% TDS which was 10% earlier.

TCS Rates have been reduced on the sale of scrap, forest produce, tendu leaves, timber, and minerals such as iron, coal, lignite. CBDT also made it clear that there will be no TDS/ TCS rate reduction in cases where tax is collected at a high rate due to the absence of PAN or Aadhaar.