STATUATORY COMPLIANCE FOR H.R &; LABOUR LAWS: NEW TDS RATE FY 09-10 AFTER BUDGET, TDS Rates Applicable from 01-10-2009

Wednesday, October 7, 2009

NEW TDS RATE FY 09-10 AFTER BUDGET, TDS Rates Applicable from 01-10-2009

TDS rates has been proposed to be changed by Finance Minister in Budget 2009 .Basically following changes has been done in the TDS rates effective from 01.10.2009

No surcharge and cess on tax deducted on non-salary payments made to resident taxpayers.so now onwards(Tax should be deducted on Basic rate only given in respective section.No education cess or Surcharge is to be deducted except in the case of salary where Tax should be deducted after including the Education cess.Surcharge on individual and HUF assessee has already been abolished for full year fy 2009-10.
Basic TDS rates for section 194 C (Payment to contractors) and 194I (payment of rent) has been changed (given in table)
Section 194C has been replaced with new section with less ambiguities.(details in coming post )
The rate of TDS will be 20 per cent in all cases, if PAN is not quoted by the deductee w.e.f. 1.04.201

NEW TDS RATES FROM 01.10.2009 PROPOSED IN BUDGET 2009 PRESENTED ON 06/07/2009
Particulars			NEW TDS RATES% IF DEDUCTEE IS
Section	Nature of Payment	CUT OFF AMOUNT	INDIVIDUAL and HUF	OTHER
194A	Interest from a Banking Company	Rs. 10,000/- p.a	10.00
194A	Interest other than from a Banking Co.	Rs. 5,000/- p.a	10.00
194C	Payment to sub-contrctor/Advertisement contracts	Rs.20,000/- per contract or Rs. 50,000/- p.a	1.00	2.00
194C	other Contractors	Rs.20,000/- per contract or Rs. 50,000/- p.a	1.00	2.00
194C	transport contractors engaged in the business of plying, hiring or leasing goods carriages.		Nil *
194H	Commission or Brokerage	Rs. 2,500/- p.a	10.00
194I	Rent other than Plant, Mach.& Eqp.	Rs. 1,20,000/- p.a	10.00
194I	Rent of Plant , Machinery & Equipments	Rs. 1,20,000/- p.a	2.00
194J	Professional Charges	Rs.20,000/-p.a	10.00
* The nil rate will be applicable if the transporter quotes his PAN. If PAN is not quoted the rate will be 1% for an individual/ HUF transporter and 2% for other transporters upto 31.3.2010
** The rate of TDS will be 20 per cent in all cases, if PAN is not quoted by the deductee w.e.f. 1.04.2010
No surcharge and cess is to be added from 01.04.2009 on tax deducted on non-salary payments made to resident taxpayers.It means that Surcharges & cess is not be included in basic TDS rates ,while deduction tds , in case of payments to resident person/domestic company only .So in case of payment to Non resident and non -domestic company surcharge and Cess is also to be included while calculating TDS amount .