TDS is one of the modes of collection of taxes, by which a certain percentage of amounts are deducted by a person at the time of making/crediting certain specific nature of payment to the other person and deducted amount is remitted to the Government account. It is similar to “pay as you earn” scheme also known as Withholding Tax in many other countries, one of the countries is USA. The concept of TDS envisages the principle of “pay as you earn”. It facilitates sharing of responsibility of tax collection between the deductor and the tax administration. It ensures regular inflow of cash resources to the Government. It acts as a powerful instrument to prevent tax evasion as well as expands the tax net.
| Section | Description | Threshold/cut off | Individual/HUF | Others |
| 192 | Salaries | NA | Average rates as applicable | |
| 193 | Interest on debentures | Rs 5,000 | 10 % | 10 % |
| 194 | Deemed dividend | NA | 10 % | 10 % |
| 194 A | Interest other than interest on securities-banks | Rs 10,000 | 10 % | 10 % |
| 194 A | Interest other than interest on securities-others | Rs 5,000 | 10 % | 10 % |
| 194 B | Lottery/crossword puzzle | Rs 10,000 | 30 % | 30 % |
| 194 BB | Winnings from horse race | Rs 5,000 | 30 % | 30 % |
| 194 C(1) | Payment to Contractors | Rs 30,000 for single payment
Rs 75,000 aggregate during the financial year |
1 % | 2 % |
| 194 C (2) | Payment to Sub contractors / advertisements | |||
| 194 D | Insurance commission | Rs 20,000 | 10 % | 10 % |
| 194 EE | Payments out of deposits under NSS | Rs 2,500 | 20 % | NA |
| 194 F | Repurchase of units by MF/UTI | Rs 1,000 | 20 % | 20 % |
| 194 G | Commission on sale of lottery tickets | Rs 1,000 | 10 % | 10 % |
| 194H | Commission or brokerage | Rs 5,000 | 10 % | 10 % |
| 194 I |
Rent (land & buildings)& (furniture and fittings)
|
Rs 1,80,000 | 10 % | 10 % |
| Rent (P&M ,equipment) | Rs 1,80,000 | 2 % | 2 % | |
| 194 IA | Transfer of immovable property other than agriculture land | Rs 50,00,000 | 1 % | 1 % |
| 194 J | Professional/technical service charges/ royalty | Rs 30,000 | 10 % | 10 % |
| 194 J (1) | Remuneration/commission to director of the company | NA | 10 % | 10 % |
| 194 J (ba) | Any remuneration/fees/commission paid to a director of a company, other than those on which tax is deductible u/s 192 | NA | 10 % | 10 % |
| 194 L | Compensation on acquisition of capital asset | Rs 1,00,000 | 10 % | 10 % |
| 194 LA | Compensation on acquisition of certain immovable property | Rs 2,00,000 | 10 % | 10 % |
source:incometaxindiapr.gov.in