With Budget 2021, some major amendments made with regard to TDS are as under:
- It is important to note that from previous budget TDS was required to be deducted by individuals and HUF even if they were not getting their accounts audited but if their turnover exceeded Rs. 1 crore or professional receipt exceeded Rs. 50 lakh.
Two new section’s have also been introduced:
- Section 194P deals with TDS on specified senior citizen by specified bank wherein if bank deducts tax under this section the senior citizen won’t be required to file Income tax return.
- Section 194Q (w.e.f. 01.07.2021) has been inserted which deals with TDS on purchase of goods which is a replica of TCS provision of section 206C(1H). Now after this section TDS will now be applicable even on goods whereas earlier TDS was applicable only on services.
Now let’s take a look at the TDS rate for FY 2021-22 which are most useful: Other than Individual/ HUF all other types of entities have to deduct TDS compulsorily unless otherwise specified.TDS rate chart FY 2021-22
To download the chart CLICK HERE.
*Total consideration will include any amount paid in name of membership fee, car parking fee, maintenance fee or advance which is incidental to transfer of property.
Provided that no deduction shall be made u/s 194C or 194J if payment is made for personal purpose i.e. paying to contractor for constructing residential house or paying professional fees to doctor for personal health etc.
Time of deduction: At the time of credit or payment, whichever is earlier. Except section 192, 194N wherein TDS needs to be deducted at the time of payment.