Changes in TDS Provisions w.e.f. 1st June 2016 – Budget_2016

1. Section 192(A) – Payment of an accumulated balance of PF due to an employee. The threshold limit increased to Rs. 50,000 from the prior limit Rs. 30,000 for the purpose of deducting TDS. Means, no TDS applicable if PF withdrawal amount is less than Rs 50,000.

2. Section 194BB – Wining from Horse Race, The TDS deduction limit increases from Rs. 5000 to Rs 10,000.

3. Section 194C – Payments to Contractors-Tax in required to be deducted in case the aggregate amount  which will be paid to the contractors exceeds from Rs100,000( Limit Increased from Rs 75000)

4. Section 194D – Insurance Commissions. Here the TDS deduction Limit has been reduced to Rs. 15000 from the prior Rs 20000 and TDS rate also come down to 5% in comparison to 10%.

5. Section 194DA – Payments In Respect of Life Insurance Policy-  Here the TDS rate reduced to 1% from 2%.

6. Section 194EE – Payments in Respect of Deposits under NSS. Here the applicable TDS rate is 10% and the reduction in rate is 10% (From 20% to 10%).

7. Section 194G – Commission on Sale of Lotteries- Threshold limit increased from Rs 1000 to Rs 15000. While, the Rate of TDS reduced to 5% from 10%.

Read Also:  Submit Form 15G/ 15H and Save your TDS

8. Section 194H – Commission or Brokerage- Here TDS rate decreased from 10% to 5% and the threshold limit is extended from Rs. 5000 to Rs. 15000.

9. Section 194K (Income in respect of Units) and 194 L (Payment of Compensation on acquisition of Capital Asset) excluded, w.e.f. 1st June 2016.

10. Section 194LA – Payment of Compensation on Acquisition of Certain Immovable Property – The threshold limit has been increased from Rs. 2,00,000 to Rs. 2,50,000 with effect from 1st June 2016.

11. Section 194LBB – Units of Investment Fund- Rate of TDS has been Changed from 10 % to following

• In case of Resident payee- TDS will be deducted at the Rate of 10%
• In case on Non-Resident Payee(not Being a Company ) or a foreign company- The TDS will be deducted at the Rates in Force

12. Insertion of New Section 194LBC –

Where any income is payable to an investor, being a resident, in respect of an investment in a securitisation trust, TDS will be deducted

• If an individual or any Hindu undivided family pay any income applied rate will be 25%
• TDS rate will applied 30% in case of any other person.

Related:

Budget 2016 – Tax Relief for Small Taxpayers

FM Jaitley Withdraws the EPF Tax Proposal of Budget 2016