Rationalization of tax deduction at Source (TDS) provisions
to deduct tax at source at the prescribed rate and deposit it with the Central Government within specified time. However, no deduction is required to be
made if the payments do not exceed prescribed threshold limit.
tax at source are proposed to be revised as mentioned in table 3 and table 4 respectively.
|Present Section||Heads||Existing Threshold Limit (Rs.)||Proposed Threshod Limit (Rs.)|
|192A||Payment of accumulated balance due to an employee||30,000||50,000|
|194BB||Winnings from Horse Race||5,000||10,000|
|194C||Payments to Contractors||Aggregate annual limit of 75,000||Aggregate annual limit of 1,00,000|
|194LA||Payment of Compensation on acquisition of certain Immovable Property||2,00,000||2,50,000|
|194G||Commission on sale of lottery tickets||1,000||15,000|
|194H||Commission or brokerage||5,000||15,000|
Table-4 : Revision in rates of deduction of tax at source on various payments mentioned in the relevant sections of the Act:
|Present Section||Heads||Existing Rate of TDS (%)||Proposed Rate of TDS (%)|
|194DA||Payment in respect of Life Insurance Policy||2%||1%|
|194EE||Payments in respect of NSS Deposits||20%||10%|
|194D||Insurance commission||Rate in force (10%)||5%|
|194G||Commission on sale of lottery tickets||10%||5%|
|194H||Commission or brokerage||10%||5%|
The following provisions which are not in operation are proposed to be omitted as detailed in Table 5.
Table 5: Certain non-operational provisions to be omitted
|194K||Income in respect of Units||To be omitted w.e.f 01.06.2016|
|194L||Payment of Compensation on acquisition of Capital Asset||To be omitted w.e.f 01.06.2016|
These amendments will take effect from 1st June, 2016.
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