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)
