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:-

  1. Sr. PPS to Secretary (Posts)
  2. PS to Director General Postal Services.
  3. PPS/ PS to Addl. DG (Co-ordination)/Member (Banking)/ Member (O)/ Member (P)/ Member (Planning & HRD)/ Member (PLI)/ Member (Tech)/AS & FA
  4. Addl. Director General, APS, New Delhi
  5. Chief General Manager, BD Directorate / Parcel Directorate / PLI Directorate
  6. Sr. Deputy Director General (Vigilance) & CVO) / Sr. Deputy Director General (PAF)
  7. Director, RAKNPA / GM, CEPT / Directors of all PTCs
  8. Director General P & T (Audit), Civil Lines, New Delhi
  9. Secretary, Postal Services Board/ All Deputy Directors General
  10. All General Managers (Finance) / Directors Postal Accounts / DDAP
  11. Chief Engineer (Civil), Postal Directorate
  12. All Sections of Postal Directorate
  13. All recognized Federations / Unions/ Associations
  14. GM, CEPT for uploading the order on the India Post website.
  15. MOF(DEA), NS-II, North Block, New Delhi.
  16. Joint Director & HOD, ICCW Building, 4 Deendayal Upadhyay Marg, New Delhi-110002
  17. Guard File
  18. 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%

 

www.postalblogs.com

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.

 

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