UNION BUDGET 2016-17
FINANCE BILL, 2016
PROVISIONS RELATING TO DIRECT TAXES
Rationalization of tax deduction at Source (TDS) provisions
Under the scheme of deduction of tax at source as provided in the Act, every person responsible for payment of any specified sum to any person is required
to deduct tax at source at the prescribed rate and deposit it with the Central Government within specified time. However, no deduction is required to be
made if the payments do not exceed prescribed threshold limit.
to deduct tax at source at the prescribed rate and deposit it with the Central Government within specified time. However, no deduction is required to be
made if the payments do not exceed prescribed threshold limit.
In order to rationalise the rates and base for TDS provisions, the existing threshold limit for deduction of tax at source and the rates of deduction of
tax at source are proposed to be revised as mentioned in table 3 and table 4 respectively.
tax at source are proposed to be revised as mentioned in table 3 and table 4 respectively.
Table 3: Increase in threshold limit of deduction of tax at source on various payments mentioned in the relevant sections of the Act
| Present Section | Heads | Existing Threshold Limit (Rs.) | Proposed Threshod Limit (Rs.) |
| 192A | Payment of accumulated balance due to an employee | 30,000 | 50,000 |
| 194BB | Winnings from Horse Race | 5,000 | 10,000 |
| 194C | Payments to Contractors | Aggregate annual limit of 75,000 | Aggregate annual limit of 1,00,000 |
| 194LA | Payment of Compensation on acquisition of certain Immovable Property | 2,00,000 | 2,50,000 |
| 194D | Insurance commission | 20,000 | 15,000 |
| 194G | Commission on sale of lottery tickets | 1,000 | 15,000 |
| 194H | Commission or brokerage | 5,000 | 15,000 |
Table-4 : Revision in rates of deduction of tax at source on various payments mentioned in the relevant sections of the Act:
| Present Section | Heads | Existing Rate of TDS (%) | Proposed Rate of TDS (%) |
| 194DA | Payment in respect of Life Insurance Policy | 2% | 1% |
| 194EE | Payments in respect of NSS Deposits | 20% | 10% |
| 194D | Insurance commission | Rate in force (10%) | 5% |
| 194G | Commission on sale of lottery tickets | 10% | 5% |
| 194H | Commission or brokerage | 10% | 5% |
The following provisions which are not in operation are proposed to be omitted as detailed in Table 5.
Table 5: Certain non-operational provisions to be omitted
| Present Section | Heads | Proposal |
| 194K | Income in respect of Units | To be omitted w.e.f 01.06.2016 |
| 194L | Payment of Compensation on acquisition of Capital Asset | To be omitted w.e.f 01.06.2016 |
These amendments will take effect from 1st June, 2016.
[Clause 70 to 79]
Stay connected with us via Facebook, Google+ or Email Subscription.
Subscribe to Central Government Employee News & Tools by Email [Click Here]
Follow us: Twitter [click here] | Facebook [click here] | Google+ [click here]
Admin
COMMENTS