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April, 06th 2007
The
following amendments have been made by the Budget 2007/CBDT
in respect of deduction of tax at source and issue of TDS
certificate.
1.
The rate of deduction of tax at source w.e.f.
1st April, 2007
are as under :
(i).
Payment to Contractors
Tax : 2%
Surcharge : 10% of Tax
Education Cess : 3% of tax and
surcharge.
Hence over
all rate will be 2.266% if surcharge is applicable
otherwise the rate will be 2.06%.
(ii).
Payment to Sub-Contractor
Tax : 1%
Surcharge : 10% of Tax
Education Cess : 3% of Tax & surcharge
Hence over
all rate will be 1.133%, if surcharge is applicable and
otherwise it will be 1.03%.
(iii). Payment of interest
A.
If paid to a person other than a company
Tax :
10%
Surcharge :
10% of tax
Education
Cess : 3% of Tax & Surcharge
Overall TDS
rate : 11.33% if surcharge is applicable and otherwise
10.30%.
B.
If paid to a company
Tax :
20%
Surcharge
: 10% of Tax
Education
Cess : 3% of tax and surcharge
Overall TDS
rule : 22.66% if surcharge is applicable and otherwise
20.60%.
(iv). Payment for Professional/Technical
Services/Commission/ Brokerage
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From 01.04.2007 to
31.05.2007 |
From 01.06.2007
onwards |
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Tax
Rate 5% |
Tax
Rate 10% |
|
Surcharge 10% |
Surcharge 10% Tax |
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Education Cess 3%
of the Surcharge |
Education Cess : 3%
of Tax & Surcharge |
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Overall TDS
Rate 5.665% if surcharge is applicable
otherwise 5.15% |
Overall TDS rate
11.33% if surcharge is applicable, otherwise 10.30% |
(v). Payment of Rent for Land and Building
A. If paid to an individual or HUF
Tax Rate : 15%
Surcharge : 10% of Tax
Education Cess : 3% of tax &
surcharge
Overall TDS rate : 16.995% if
surcharge is applicable otherwise
15.45%
B. If paid to a person other than
individual or HUF
Tax Rate : 20%
Surcharge : 10% of Tax
Education Cess : 3% of Tax &
Surcharge
Overall TDS Rate : 22.66% if
surcharge is applicable
otherwise 20.60%
(vi). Payment of Rent for Plant and Machinery
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From 01.04.2007
to 31.05.2007 |
From 01.06.2007
onwards |
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Tax Rate: 15% if
paid to individual or HUF
:
20% if paid to a person other than Individual and
HUF |
Tax Rate
: 10% for all |
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Surcharge :10% |
Surcharge 10% Tax |
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Education Cess :
3% of Tax and Surcharge |
Education Cess : 3%
of Tax & Surcharge |
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Overall TDS Rate
:16.995% or 22.66% if surcharge is applicable
otherwise 15.45% or is 20.60% |
Overall TDS rate
11.66% if surcharge is applicable, otherwise 10.30% |
(vii) Salaries
Tax to be
computed at normal rate on the basis of following table.
Basic
Exemption
Rs.1,10,000/-
From
1,10,000/- to 1,50,000 @ 10%
1,50,000/- to 2,50,000 @ 20%
2,50,000/- onward @ 30%
Surcharge to
be levied @ 10% in case taxable income exceeds
Rs.10,00,000/-. Education Cess to be added @ 3%.
However
Basic Exemption for Woman Tax Payers shall be Rs.1,45,000/-
and for Senior Citizen Rs.1,95,000/-
2.
Education Cess @ 3% is applicable with effect from 1.4.2007.
3.
Surcharge for deducting tax at source shall be leviable in
case where payment is made to an individual or HUF, AOP or
body of individual when aggregate amount paid or likely to
be paid and subject to tax deduction exceeds Rs.10 lakhs, in
case payment is made to a firm or a domestic company when
aggregate amount paid or likely to be paid exceeds Rs.1
crore. In the case of payment to other than a domestic
company the surcharge shall be levied @ 2.5%. Applicability
of surcharge, in case payment exceeds the above prescribed
limit is effective from 01.04.2007.
4.
Change in rate of deduction of tax at source on payment of
commission, brokerage, professional/technical services, rent
shall be effective from 01.06.2007.
5
Applicability of increased limit of Rs.10,000/- for non
deduction of tax in respect of payment of interest by bank
shall be effective from 01.06.2007.
6.
Applicability of leviability to deduct tax at source on
payment by individual/HUF having turnover exceeding the
limit prescribed in Section 44AB in respect of payment to
contractors shall be effective from 1st June,
2007.
7. TDS Certificate to be issued in revised form No.
16, 16A & 27 notified by the CBDT
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