Page 60 - Union Budget 2016-17 Analysis

• These amendments will take effect from 1st April, 2017 and will, accordingly, apply in relation
to the assessment year 2017-18 and subsequent years.

EE. Rationalization of tax deduction at Source (TDS) provisions

• 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 tables below:

• Increase/ Decrease in threshold limit of deduction of tax at source on various payments
mentioned in the relevant sections of the Act

Present Heads Existing Proposed
Section Threshold Threshod Limit
Limit (Rs.)
(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 Aggregate
194LA Payment of Compensation on acquisition of certain annual limit of annual limit of
Immovable Property
194D 27,050,0,00000 12,,5000,,000000
194G Insurance commission
194H Commission on sale of lottery tickets 20,000 15,000
Commission or brokerage 1,000 15,000
5,000 15,000

• Revision in rates of deduction of tax at source on various payments mentioned in the
relevant sections of the Act

Present Heads Existing Rate of Proposed Rate of
Section
TDS (%) TDS (%)

194DA Payment in respect of Life Insurance Policy 2% 1%
194EE Payments in respect of NSS Deposits 10%
194D Insurance commission 20% 5%
Rate in
force (10%)

194G Commission on sale of lottery tickets 10% 5%
194H Commission or brokerage 10% 5%

• Certain non-operational provisions to be omitted

Present Heads Proposal
Section
To be omitted w.e.f 01.06.2016
194K Income in respect of Units To be omitted w.e.f 01.06.2016
194L Payment of Compensation on acquisition of Capital Asset

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