Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Wednesday, March 2, 2016

Changes in TDS provisions by Finance Bill,2016 effective from 01.06.2016

Finance Bill has provided changes in rates as well as in threshold limits to rationalize the TDS provisions. The rates and the existing threshold limit for deduction of tax at source are proposed to be revised. These amendments will take effect from 1st June, 2016.
The threshold limit of deduction of tax at source on various payments mentioned in the relevant sections of the Act is proposed to be increased:
Section
Nature of Payment subjected to tax with Threshold limit

192A
Payment of accumulated balance due to an employee
194BB
Winnings from Horse Race
194C
Payments to Contractors
194LA
Payment of Compensation on acquisition of some Immovable Property
194D
Insurance commission
194G
Commission on sale of lottery tickets
194H
Commission or brokerage
The Rates of deduction of tax at source on certain payments are proposed to be revised are hereunder:
Section
Nature of Payments subjected to deduction of tax at source
194DA
Payment in respect of Life Insurance Policy
194EE
Payments in respect of NSS Deposits
194D
Insurance commission
194G
Commission on sale of lottery tickets
194H
Commission or brokerage

No TDS in case of Form 15G/15H for rental payments up to threshold limit:
As per the existing provisions threshold limit is Rs.1,80,000 under section 194(I) for any financial year for deduction of tax under this section on payment of Rent.  In order to reduce compliance burden in such cases, it is proposed to amend the provisions of section 197A for making the recipients of payments referred to in section 194-I. In case of self-declaration in Form no 15G/15H for non-deduction of tax at source there will be no tax as per the provisions of section 197A.
Tax Collection at Source on Sale of Vehicle:
The tax collection at the rate of one per cent is provided for
-          On sale of motor vehicle of the value exceeding ten lakh rupees
-          On sale in cash of any goods except  bullion and jewelry exceeding Rs.2,00,0000/-
-          On provision of services exceeding two lakh rupees

(other than the payments on which TDS Provisions are already applicable)

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