1. Reduction in rate 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:-

TDS Rate Chart for FY 2020-21 Pre & Post 14th May 2020

S No. Section Of IT act Nature of Payment Existing Rate of TDS Reduced rate from 14/05/20 to 31/03/21
1 193 Interest on Securities 10% 7.50%
2 194 Dividend 10% 7.50%
3 194 A Interest other than interest on securities 10% 7.50%
4 194 C Payment of Contract or and sub contractors 1% (individual / HUF) 2%   (others) 0.75% (individual/HUF) 1.5% (others)
5 194 D Insurance Commission 5% 3.75%
6 194 DA Payment in respect of life insurance policy 5% 3.75%
7 194 EE Payments in respect of deposits under National Savings Scheme 10% 7.50%
8 194 F Payments on account of re-purchase of Units by Mutual Funds or UTI 20% 15%
9 194 G Commission , prize etc., on sale of lottery tickets 5% 3.75%
10 194 H Commission or brokerage 5% 3.75%
11 194 I(a) Rent for plant and machinery 2% 1.5%
12 194 I(b) Rent for immovable property 10% 7.5%
13 194 IA Payment for acquisition of immovable property 1% 0.75%
14 194 IB Payment of rent by individual or HUF 5% 3.75%
15 194 IC Payment for Joint Development Agreements 10% 7.5%
16 194 J Fee for Professional or Technical Services (FTS), Royalty, etc. 2% (FTS, certain royalties, call centre) 10% (others) 1.5% (FTS, certain royalties, call centre) 7.5% (others)
17 194 K Payment of dividend by Mutual Funds 10% 7.5%
18 194 LA Payment of Compensation on acquisition of immovable property 10% 7.5%
19 194 LBA(1) Payment of income by Business trust 10% 7.5%
20 194 LBB(i) Payment of income by Investment fund 10% 7.5%
21 194 LBC(1) Income by securitisation trust 25% (Individual / HUF) 30% (Others) 18.75% (Individual/HUF) 22.5% (Others)
22 194 M Payment to commission , brokerage etc. by Individual and HUF 05% 3.75%
23 194 O TDS on e-commerce participants 1% (w.e.f. 1.10.2020 ) 0.75%

2.Therefore, Tax Deduction at Source (TDS) on the amount paid or credited during the period from14th May,2020 to 31st March,2021 shall be deducted at the reduced rates specified in the table.

3.It is further stated that there shall be no reduction in rates of Tax Deduction at Source (TDS) or  Tax Collection at Source (TCS), where the tax is required to be deducted or collected at higher rate due to non furnishing of PAN / Aadhaar.  Eample, 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%.

4.Legislative amendments in this regard shall be proposed in due course.