SB order 23/2020 – Reduction of Rate of TDS in POSB
SB order 23/2020.
e. F.No.FS-79/2/2020-FS
Government of India
Ministry of Communications
Department of Posts
(Financial Services Division)
Dak Bhawan, New Delhi-110001
Dated: – 26 /06/2020
To,
All Head of Circles/Regions,
Subject:- Reduction in rate of Tax DReduction of Rateducted at Source (TDS) in POSB schemes regarding- SB order 23/2020.
Sir/Madam,
I am directed to say that Central Board of Direct Taxes, Department of Revenue, Ministry of Finance has issued a press release dated 13.05.2020 (Copy enclosed) as “In order to provide more funds at the disposal of the taxpayers for dealing with the economic situation arising out of COVID-19 pandemic, the rates 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”.
Accordingly revised rates of TDS in respect of POSB schemes are as under as per SB order 23/2020-
| SL. No. | Section of
Income Tax |
Nature of Payment | Existing rate of TDS |
Reduced rate from 14/05/2020 to 31/03/2021 | Remarks |
| 1. | 194 A | Interest on other than interest of security | 10% | 7.5% | SCSS |
| 2. | 194 EE | Payment in respect of
deposit under NSS-87 |
10% | 7.5% | NSS-87 |
| 3. | 194 H | Commission or brokerage | 5% | 3.75% | MPKBY/SAS commission. |
2. Necessary amendments are being made in Finacle. Non-CBS post offices should also take necessary action accordingly.
3. It is requested to circulate the amendment to all concerned for information, guidance and necessary action.
4. This issues with the approval of the Competent Authority.
Enclosed: As above
(Devendra Sharma)
Assistant Director (SB)
Copy of SB order 23/2020 to:-
- Sr. PPS to Secretary (Posts)
- PS to Director General Postal Services.
- PPS/ PS to Addl. DG (Co-ordination)/Member (Banking)/ Member (O)/ Member (P)/ Member (Planning & HRD)/ Member (PLI)/ Member (Tech)/AS & FA
- Addl. Director General, APS, New Delhi
- Chief General Manager, BD Directorate / Parcel Directorate / PLI Directorate
- Sr. Deputy Director General (Vigilance) & CVO) / Sr. Deputy Director General (PAF)
- Director, RAKNPA / GM, CEPT / Directors of all PTCs
- Director General P & T (Audit), Civil Lines, New Delhi
- Secretary, Postal Services Board/ All Deputy Directors General
- All General Managers (Finance) / Directors Postal Accounts / DDAP
- Chief Engineer (Civil), Postal Directorate
- All Sections of Postal Directorate
- All recognized Federations / Unions/ Associations
- GM, CEPT for uploading the order on the India Post website.
- MOF(DEA), NS-II, North Block, New Delhi.
- Joint Director & HOD, ICCW Building, 4 Deendayal Upadhyay Marg, New Delhi-110002
- Guard File
- Spare copies.
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi, 13th May, 2020
PRESS RELEASE
Reduction in rate of Tax Deduction at Source (TDS) & Tax Collection at Source (TCS)
In order to provide more funds at the disposal of the taxpayers for dealing with the economic situation arising out of COVID-19 pandemic, the rates 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:-
| S. No | Section of the Income- tax Act |
Nature of Payment | Existing Rate of TDS |
Reduced rate from 14/05/2020 to 31/03/2021 |
| 1 | 193 | Interest on Securities | 10% | 7.5% |
| 2 | 194 | Dividend | 10% | 7.5% |
| 3 | 194A | Interest other than interest on securities |
10% | 7.5% |
| 4 | 194C | Payment of Contractors and sub-contractors |
1% (individual/ HUF) 2% (others) | 0.75% (individual/HUF) 1.5% (others) |
| 5 | 194D | Insurance Commission | 5% | 3.75% |
| 6 | 194DA | Payment in respect of life insurance policy |
5%– | 3.75% |
| 7 | 194EE | Payments in respect of deposits under National Savings Scheme |
10% | 7.5% |
| 8 | 194F | Payments on account of re-purchase of Units by Mutual Funds or UTI | 20% | 15% |
| 9 | 194G | Commission, prize etc., on sale of lottery tickets |
5% | 3.75% |
| 10 | 194H | 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 | 194-1B | Payment of rent by individual or HUF | 5% | 3.75% |
| 15 | 194-IC | Payment for Joint Development Agreements | 10% | 7.5% |
| 16 | 194J | 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 | 194K | Payment of dividend by Mutual Funds |
10% | 7.5% |
| 18 | 194LA | Payment of Compensation on acquisition of immovable property | 10% | 7.5% |
| 19 | 194LBA(1) | Payment of income by Business trust |
10% | 7.5% |
| 20 | 194LBB(i) | Payment of income by Investment fund | 10% | 7.5% |
| 21 | 194LBC(1) | Income by securitisation trust |
25% (Individual/ HUF) 30% (Others) | 18.75% (Individual/HUF) 22.5% (Others) |
| 22 | 194M | Payment to commission, brokerage etc. by Individual and HUF |
5% | 3.75% |
| 23 | 194-O | TDS on e-commerce participants | 1% (w.e.f. 01.10.2020) | 0.75% |
2. Further, the rate of Tax Collection at Source (TCS) for the following specified receipts has also been reduced by 25% for the period from 14th May, 2020 to 31st March, 2021:-
| S. No | Section of the Income-tax Act |
Nature of Receipts | Existing Rate of TCS |
Reduced rate from 14/05/2020 to 31/03/2021 |
| 1 | 206C(1) | Sale of | ||
| (a) Tendu Leaves | 5% | 3.75% | ||
| (b)Timber obtained under a forest lease | 2.5% | 1.875% | ||
| (cTimber obtained by any other mode | 2.5% | 1.875% | ||
| (d)Any other forest produce not being timber/tendu leaves | 2.5% | 1.875% | ||
| (e)scrap | 1% | 0.75% | ||
| (f) Minerals, being coal or lignite or iron ore | 19/0 | 0.75% | ||
| 2 | 206C(1C) | Grant of license, lease, etc. of
(a) Parking lot |
2% | 1.5% |
| (b) Toll Plaza | 2% | 1.5% | ||
| (c) Mining and quarrying | 2% | 1.5% | ||
| 3 | 206C(1 F) | Sale of motor vehicle above 10 lakhs | 1% | 0.75% |
| 4 | 206C(1H) | Sale of any other goods | 0.1% (w.e.f 01.10.2020) |
0.75% |
3. Therefore, TDS on the amount paid or credited during the period from 14th May, 2020 to 31th March, 2021 shall be deducted at the reduced rates specified in the table in para 1 above. Similarly, the tax on the amount received or debited during the period from 14th May, 2020 to 31′ March, 2021 shall be collected at the reduced rates specified in the table in para 2 above.
4. It is further stated that there shall be no reduction in rates of TDS or TCS, where the tax is required to be deducted or collected at higher rate due to non-furnishing of PAN/Aadhaar. For example, 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%.
5. Legislative amendments in this regard shall be proposed in due course.
(Surabhi Ahluwalia)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT
SB order 23/2020.
