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What is the Percentage of Tax Deducted at Source (TDS)?

Section 80C of ITA states that there are limitations on the tax return amount for both spendings and investments. An individual can claim deductions worth ₹1,50,000.

  • Jun 16, 2022
  • 1,001 Views

TDS (Tax Deducted at Source) is a taxation procedure in which the person or an organization in charge of making a payment deducts the appropriate tax before allocating the payment to the receiver. Salary, incentive, commission, FD interest, rental income, and other regular payments that are taxed using the TDS technique are some examples of the same. The TDS rates which apply to particular payments are specified in the Income Tax Act of 1961; like for instance, in most circumstances, TDS on insurance claim in the event of maturity is applicable.

Basics OF TDS Rates For Salaried Employees

Any corporation has the discretion to deduct tax at source when issuing a payment to an employee. When employees are paid, most employers subtract taxes from their wages, and the TDS deducted from an employee’s entire income is eligible for tax claims. TDS is really not collected if your overall income is less than ₹2,50,000. Both men and women under the age of 60 are eligible for this amount. It is generally taken from a person’s pay and ranges anywhere between 10% to 30%.

Percentage Chart for TDS Calculator FY 2019-20 (AY 2020-2021)

Section

Type Of Payment

TDS Rates For HUF/Individuals
(Indian Citizens)

TDS Rates For NRI’s In India

192

Income From Salary

As Per Given Income Tax Rates

As Per Income Tax Rates

194

Income From Lotteries, Cards, And Other Games

30

30

194BB

Income Through Horse Racing Wins

30

30

194EE

Contributions Towards NSS Deposits

10

10

194F

Payment For Mutual Funds Or Unit Trust Of India

20

20

194G

Income Earned Through Commission, Sales Of Lottery Ticket And Other Transactions

5

5

194LBB

Investment Fund Income For Unit Holder (apart from the exemption for income under Section 10 (23FBB) )

10

30

194LBC

Income From Investment Scrutinisation Funds In Accordance With Section 115TCA

25 & -30 For Anyone Else

30

The whole point of TDS isn’t just about paying taxes. It also has a side that provides TDS benefits to deductees, which we shall discuss now. TDS offers tax exemptions in the following cases:

Rental Income from House

House Rent Allowance or HRA can be used by a salaried individual who lives in rental housing. This might be excluded from income tax entirely or partially.

TDS Refund Claim

If you pay more TDS than is warranted based on your income, you can claim a TDS refund online for the difference.

DS Benefits On Mobile Bill

A taxpayer’s cell and home phone bills may be deductible. An employee can seek a tax-free compensation of expenditures incurred under the income tax legislation. Further, they can seek reimbursement for either the exact bill amount paid or the amount included in their wage package.

Tax Exemption for Individual on Reallocation

These days, corporations have many sites around the country. There’s a chance you’ll be asked to relocate to a different part of the city for commercial reasons. Such a move might result in costs such as relocating to a new home, moving heavy things, automobile transportation, vehicle registration, enrolling your children in a new school, etc. Fortunately, the employer is responsible for these costs.

Insurance Policy

Premium paid for an insurance policy is not taxable, but if the policy matures, you may have to pay TDS on insurance claim.

To summarize, the TDS percentage varies according to the level of income. These TDS rates are set by the government to contribute to the country’s growth, taking into account the current economic situation, inflation rate, and other unforeseen costs.

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Features

  • Increasing Life Cover*
  • Guaranteed^ Maturity Benefits
  • Enhanced Protection Through Riders
  • Tax Benefits
  • Dual Benefits: Guaranteed^Maturity + Death benefits

Ref. No. KLI/22-23/E-BB/999

T&C

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Features

  • Enhanced Protection Through Riders
  • Life Cover
  • Tax Savings
  • Multiple Premium Payment Terms
  • Guaranteed @ Loyalty Addion
  • Accrued Guaranteed @ Additions

Ref. No. KLI/22-23/E-BB/490

T&C

- A Consumer Education Initiative series by Kotak Life

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