Reduction in rate of Tax Deducted at Source (TDS) in POSB schemes regarding


S.B. Order 23/2020

e. F.No.FS-79/2/2020-FS
Government of 
India
Ministry of Communications
Department of Posts
(Financial Services Division)

Dak Bhawan, New Delhi-110001
Dated: – 26 /06/2020

To,

All Head of Circles/Regions,

Subject:- Reduction in rate of Tax Deducted at Source (TDS) in POSB schemes regarding.

Sir/Madam.

I am directed to say that Central Board of Direct Taxes, Department of Revenue, Ministry of Finance has issued a press release dated 13.05.2020 (Copy enclosed) as in order to provide more funds at the disposal of the taxpayers for dealing with the economic situation arising out of COVID-19 pandemic. the rates of Tax Deduction at Source(TDS) for the following non-salaried specified payments made to residents has been reduced by 25% for the period from 14th May, 2020 to 31st March, 2021″.

Accordingly revised rates of TDS in respect of POSB schemes are as under:-

SI. No. Section of
income Tax
Nature of Payment Existing  rate of
TDS
Reduced rate from 14/05/2020 to 31/03/2021 Remarks
I 194 A Interest on other than interest of security 10% 7.5% SUSS
2. 194 EE Payment in respect of deposit under NSS-87 10% 7.5% NSS-87
3. 194 1-I Commission or brokerage 5% 3.75% MPKBY/SAS commission.

2. Necessary amendments are being made in Finacle. Non-CBS post offices should also take necessary action accordingly.

3. It is requested to circulate the amendment to all concerned for information, guidance and necessary

4. This issues with the approval of the Competent Authority.

Enclosed: As above(Devendra Sharma)
Assistant Director (SB)

Copy to:

1. PPS to Secretary (Posts)

2. PS to Director General Postal Services.

3. PPS/ PS to Addl. DG (Co-ordination)/Member (Banking)/ Member (0)/ Member (P)/ Member (Planning & HRD)/ Member (PLI)/ Member (Tech)/AS & FA

4. Addl. Director General, APS, New Delhi

5. Chief General Manager, BD Directorate / Parcel Directorate / PLI Directorate

6. Deputy Director General (Vigilance) & CVO) / Sr. Deputy Director General (PAF)

7. Director, RAKNPA / GM, CEPT / Directors of all PTCs

8. Director General P & T (Audit), Civil Lines, New Delhi

9. Secretary, Postal Services Board/ All Deputy Directors General

10. All General Managers (Finance) / Directors Postal Accounts / DDAP

11. Chief Engineer (Civil), Postal Directorate

12. All Sections of Postal Directorate

13. All recognized Federations / Unions/ Associations

14. GM, CEPT for uploading the order on the India Post website.

15. MOF(DEA), NS-II, North Block, New Delhi.

16. Joint Director & HOD. ICCW Building, 4 Deendayal Upadhyay Marg, New Delhi-1 10002

17. Guard File

18. Spare copies.

Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

New Delhi, 13`h May, 2020

PRESS RELEASE

Reduction in rate of Tax Deduction at Source (TDS) & Tax Collection at Source (TCS)

In order to provide more funds at the disposal of the taxpayers for dealing with the economic situation arising out of COVID-19 pandemic, the rates of Tax Deduction at Source (TDS) for the following non-salaried specified payments made to residents has been reduced by 25% for the period from 14th May, 2020 to 31st March, 2021:-

S. No Section of
the Income-
tax Act
Nature of Payment Existing Rate of TDS Reduced rate
from 14/05/2020 to 31/03/2021
1 193 Interest on Securities 10% 7.5%
2 194 Dividend 10% 7.5%
3 194A Interest other than interest on securities 10% 7.5%
4 194C Payment of Contractors and sub-contractors 1% (individual / HUF)
2% (others)
0.75% (individual / HUF) 1.5% (others)
5 194D insurance Commission 5% 3.75%
6 194DA Payment in respect of life insurance policy 5% 3.75%
7 194EE Payments in respect of deposits under National
Savings Scheme
10% 7.5%
8 194F Payments on account of
re-purchase of Units by
Mutual Funds or UTI
20% 15%
9 194G Commission, prize etc.. on sale of lottery tickets 5% 3.75%
10 194H Commission or brokerage 5% 3.75%
11 194-1(a) Rent for plant and machinery 2% 1.5%
12 194-1(b) Rent for immovable property 10% 7.5%
13 194-1A Payment for acquisition of immovable property 1% 0.75%
14 194-IB Payment of rent by individual or HUF 5% 3.75%
15 194-1C Payment for Joint Development Agreements I 0% 7.5%
16 194J Fee for Professional or Technical Services (FTS),
Royalty, etc.
2% (FTS, certain royalties,
call centre)
10% (others)
1.5% (FTS,
certain royal?
ties, call centre)
7.5% (others)
17 194K Payment of dividend by
Mutual Funds
10% 7.5%
18 194LA Payment of Compensation on acquisition of immovable property 10% 7.5%
19 194LBA(1) Payment of income by
Business trust
10% 7.5%
20 194LBB(i) Payment of income by In-
vestment fund
10% 7.5%
21 194LBC(1) Income by securitisation
trust
25% (Individual / HUF)
30% (Others)
I 8.75% (Individual / HUF)
22.5% (Others)
22 194M Payment to commission.
brokerage etc. by Individual and HUF
5% 3.75%
23 194-0 TDS on e-commerce participants 1%
(w.e.f. 1.10.2020)
0.75%

2. Further, the rate of Tax Collection at Source (TCS) for the following specified receipts has also been reduced by 25% for the period from 14th May, 2020 to 315` 2021 :-

S. No Section of
the Income-tax Act
Nature of Receipts Existing Rate of TCS Reduced rate
from 14/05/2020 to
31/03/2021
I 206C(1) Sale of
(a) Tendu Leaves 5% 3.75%
(b)Timber obtained under a forest lease 2.5% 1.875%
(c) timber obtained by any other mode 2.5% 1.875%
(d) Any other forest produce not being timber/tendu leaves 2.5% 1.875%
(e) scrap i % 0.75%
(f) Minerals, being coal or lignite or iron ore 1% 0.75%
2 206C (1C) Grant of license, lease, etc. of (a) Parking lot 2% I .5%
(b) foil Plaza 2% 1.5%
(c) Mining and quarrying 2% 1.5%
  206C (1F) Sale of motor vehicle above 10 lakhs 1% 0.75%
4 206C (1H) Sale of any other goods 0.1%
(w.e.f
01.10.2020)
0.75%

3. Therefore. TDS on the amount paid or credited during the period from 14th May, 2020 to 31″ March, 2021 shall be deducted at the reduced rates specified in the table in para 1 above. Similarly, the tax on the amount received or debited during the period from 14th May, 2020 to 31ST March, 2021 shall be collected at the reduced rates specified in the table in para 2 above.

4. It is further stated that there shall be no reduction in rates of TDS or TCS, where the tax is required to be deducted or collected at higher rate due to non-furnishing of PAN/Aadhaar. For example, if the tax is required to be deducted at 20% under section 206AA of the Income-tax Act due to non-furnishing of PAN/Aadhaar, it shall be deducted at the rate of 20% and not at the rate of 15%.

5. Legislative amendments in this regard shall he proposed in due course.

(Surabhi Ahluwalia)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT


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