TDS 194 R
📘 Section 194R – TDS on Benefits or Perquisites (from Business or Profession)
Section 194R of the Income Tax Act, 1961 deals with TDS on any benefit or perquisite (in cash
or kind) arising from business or profession given to a resident.
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✅ Effective From:
1st July 2022
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✅ Purpose:
To tax non-cash or partly-cash benefits (like gifts, rewards, foreign trips, free samples, etc.)
received by dealers, distributors, professionals, etc., which were earlier often not reported.
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✅ Who Has to Deduct TDS?
Any person (individual, company, firm, etc.) providing benefits or perquisites to a resident arising
from:
Business
Profession
🔸 Individuals/HUFs are required to deduct TDS only if:
Their turnover exceeds ₹1 crore (for business) or
₹50 lakh (for profession) in the previous financial year
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✅ TDS Rate Under Section 194R:
10% of the value of benefit or perquisite
20% if PAN is not provided
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✅ Threshold Limit:
No TDS if value of benefit/perquisite ≤ ₹20,000 in a financial year per recipient
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✅ Important Points:
TDS is applicable whether the benefit is in cash, kind, or both
If benefit is in kind or partly in kind, and cannot be recovered from recipient, the provider must
bear and pay TDS from own funds
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✅ Examples of Benefits/Perquisites Covered:
Free gifts given to dealers
Foreign trip as a sales incentive
Free tickets, hotel stays, cars, mobile phones
Any other non-contractual benefit provided during the course of business
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✅ Example:
A company gives a mobile phone worth ₹30,000 to a dealer:
TDS = 10% of ₹30,000 = ₹3,000
If not recoverable from dealer, company must gross up:
TDS = ₹3,333 (approx.)
So company bears cost: ₹30,000 + ₹3,333 = ₹33,333
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✅ Exceptions:
No TDS under 194R for employees — these are taxed as salary
Not applicable if recipient is a non-resident (covered under 195)
TDS 194 O
📘 Section 194O – TDS by E-Commerce Operators
Section 194O of the Income Tax Act, 1961 mandates TDS deduction by e-commerce operators
on payments made to e-commerce participants (sellers).
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✅ Applicable From:
1st October 2020
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✅ Purpose:
To bring e-commerce sellers into the TDS net and ensure proper tax compliance for income
earned through online platforms like:
Amazon
Flipkart
Meesho
Ola
Zomato, etc.
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✅ Who Has to Deduct TDS?
An e-commerce operator (like Amazon, Flipkart) must deduct TDS when:
It facilitates the sale of goods or provision of services of an e-commerce participant (seller)
through its digital platform.
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✅ TDS Rate Under Section 194O:
PAN Provided by Seller TDS Rate
Yes 1%
No 5% (as per Section 206AA)
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✅ Threshold Limit:
If the e-commerce participant is an individual or HUF, AND
The total sales during the year ≤ ₹5 lakh, AND
👉
The seller has provided PAN or Aadhaar,
Then no TDS is required.
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✅ Time of Deduction:
TDS is deducted at the time of credit or payment, whichever is earlier.
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✅ TDS to be Deducted On:
Gross amount of sale or service (including GST, delivery, commissions, etc.)
Even if payment is made directly by the buyer to the seller (i.e., COD or direct transfers), the
operator must still deduct TDS.
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✅ Example:
A seller earns ₹6,00,000 on Flipkart in FY 2025-26:
Flipkart will deduct 1% TDS = ₹6,000
TDS applies even if part of the amount is received directly by the seller from customers.
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✅ Return Filing:
E-commerce operators must report this TDS in Form 26Q
Must issue TDS certificate (Form 16A) to sellers
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✅ Key Exemptions:
Operators are not required to deduct TDS on payments made to non-residents under this
section
If the transaction is already subject to TDS under another section (like 194C or 194J), then
194O will still apply, giving it overriding effect
TDS 194 N
📘 Section 194N – TDS on Cash Withdrawals
Section 194N of the Income Tax Act, 1961 mandates TDS on cash withdrawals made from a
bank, co-operative bank, or post office if the withdrawals exceed specified limits.
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✅ Applicable From:
1st September 2019 (amended in Budget 2020)
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✅ Who Is Covered?
Any person (individual, company, firm, etc.) withdrawing cash from:
A banking company
A co-operative bank
A post office
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✅ TDS Rates under Section 194N:
Cash Withdrawal Amount in a Financial Year Income Tax Return (ITR) Filed in Any of Last 3
FYs TDS Rate
Up to ₹1 crore Yes NIL
Above ₹1 crore Yes 2%
₹20 lakh to ₹1 crore No 2%
Above ₹1 crore No 5%
> ⚠️ If PAN is not provided, TDS at 20% under Section 206AA may apply.
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✅ Example Scenarios:
1. Case 1: Company files ITR and withdraws ₹1.5 crore
TDS = 2% on ₹50 lakh = ₹1,00,000
2. Case 2: Individual hasn’t filed ITR in any of last 3 years, withdraws ₹60 lakh
TDS = 2% on ₹40 lakh = ₹80,000
3. Case 3: Trust withdraws ₹1.2 crore without filing ITR
TDS =
2% on ₹80 lakh = ₹1,60,000 (₹20L–₹1Cr)
5% on ₹20 lakh = ₹1,00,000 (above ₹1Cr)
Total = ₹2,60,000
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✅ Purpose of 194N:
To discourage large cash transactions
To promote digital payments
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✅ Exemptions from 194N:
TDS under 194N does not apply to:
Government bodies
Banks, co-op banks, post offices
White label ATM operators
Business correspondents of banks
TDS 194 H
📘 Section 194H – TDS on Commission or Brokerage
Section 194H of the Income Tax Act, 1961 deals with TDS on income by way of commission or
brokerage paid to a resident.
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✅ What is Covered Under Section 194H?
TDS is applicable on:
Commission
Brokerage
👉 Includes:
Payments for services rendered (except professional services)
Payments for facilitating sale or purchase of goods or services
👉 Excludes:
Insurance commission (covered under Section 194D)
Professional fees (covered under Section 194J)
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✅ Who Has to Deduct TDS?
Any person (except individual/HUF not under tax audit in the previous financial year)
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✅ TDS Rate Under Section 194H:
PAN Status TDS Rate
PAN Provided 5%
PAN Not Provided 20% (as per Section 206AA)
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✅ Threshold Limit:
No TDS if commission or brokerage paid during the financial year is ≤ ₹15,000
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✅ Time of Deduction:
TDS is to be deducted at the time of credit or payment, whichever is earlier.
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✅ Due Date for TDS Deposit:
7th of next month
For March, deposit by 30th April
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✅ Example:
A company pays ₹20,000 as commission to a marketing agent:
Exceeds ₹15,000 → TDS applies
TDS = 5% of ₹20,000 = ₹1,000
Deduct and deposit TDS accordingly
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✅ Additional Notes:
Deductor must issue Form 16A (TDS certificate) to the payee
File quarterly TDS return in Form 26Q
TDS 194 A
📘 Section 194A – TDS on Interest (Other than "Interest on Securities")
Section 194A of the Income Tax Act, 1961 applies to TDS on interest income (excluding interest
on securities like debentures, government bonds, etc.).
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✅ What Kind of Interest is Covered?
Interest on fixed deposits (FDs)
Interest on recurring deposits (RDs)
Interest on loans (except banks)
Interest from NBFCs, co-operative societies, post offices, etc.
❌ Does not include interest on securities — that is covered under Section 193.
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✅ Who Must Deduct TDS?
Banks, co-operative societies, NBFCs
Companies, firms, and other entities (excluding individuals/HUFs not liable for tax audit in the
previous FY)
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✅ TDS Rates Under Section 194A:
PAN Status TDS Rate
PAN provided 10%
PAN not provided 20%
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✅ Threshold Limits (No TDS if interest does not exceed):
Payer Type Threshold
Banks/co-op. banks/post offices ₹40,000 (₹50,000 for senior citizens)
Others (e.g., NBFCs, companies) ₹5,000
> These are aggregate limits per financial year per payee
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✅ Time of TDS Deduction:
At the time of credit or payment, whichever is earlier
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✅ Due Date for TDS Payment:
7th of next month
30th April for March payments
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✅ Form 15G / 15H:
If recipient submits Form 15G (below 60 years) or 15H (senior citizens), and their total income is
below taxable limit, then no TDS needs to be deducted
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✅ Example:
If a bank pays ₹60,000 interest to a senior citizen:
Exceeds ₹50,000 threshold
TDS = 10% of ₹60,000 = ₹6,000 (unless Form 15H is submitted)
TDS 194 Q
📘 Section 194Q – TDS on Purchase of Goods
Section 194Q of the Income Tax Act, 1961 deals with TDS on purchase of goods by a buyer
from a resident seller.
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✅ Applicable From:
1st July 2021
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✅ Who is liable to deduct TDS under 194Q?
A buyer is required to deduct TDS if:
1. Their total sales/turnover/gross receipts in the preceding financial year is more than ₹10 crore
2. They purchase goods worth more than ₹50 lakh in the current financial year from a resident
seller
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✅ TDS Rate under Section 194Q:
Condition TDS Rate
Seller provides PAN 0.1%
Seller does not provide PAN 5%
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✅ Time of Deduction:
TDS must be deducted at the time of credit of the purchase amount to the seller's account or
payment, whichever is earlier.
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✅ Threshold Limit:
TDS applies only on the amount exceeding ₹50 lakh in a financial year per seller
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✅ Important Exclusions:
TDS under 194Q is not applicable if:
TDS is already deductible under any other provision (like 194C)
TCS is applicable under Section 206C(1H) and buyer is liable under 194Q, then 194Q will apply
and not 206C(1H)
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✅ Example:
If a company with ₹12 crore turnover in FY 2024-25 buys goods worth ₹70 lakh from a resident
seller in FY 2025-26:
TDS is applicable on ₹20 lakh (i.e., ₹70L − ₹50L)
TDS = 0.1% of ₹20,00,000 = ₹2,000
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✅ Due Date for Deposit:
7th of the following month
For March, due by 30th April
TDS 194 J
📘 Section 194J – TDS on Fees for Professional or Technical Services
Section 194J of the Income Tax Act, 1961 mandates TDS on payments made to residents for
professional or technical services, royalty, etc.
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✅ Who should deduct TDS?
All persons (companies, firms, trusts, etc.)
Individuals/HUFs only if they were under tax audit in the previous financial year.
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✅ TDS is deducted on payments such as:
1. Professional services
Legal, medical, engineering, architectural, accountancy, interior decoration, etc.
2. Technical services
Managerial, technical or consultancy services (not including salaries)
3. Royalty
Use of patent, copyright, trademark, design, or technical know-how
4. Non-compete fees
Payments to not share or carry on similar business/profession
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✅ TDS Rates under Section 194J:
Nature of Payment TDS Rate
Professional services 10%
Technical services (w.e.f. 1 April 2020) 2%
Royalty (except for sale/distribution of film) 10%
Non-compete fees 10%
> ⚠️ If PAN not provided, TDS @ 20%
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✅ Threshold Limit:
No TDS if total amount paid during the financial year ≤ ₹30,000 for each category.
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✅ Time of Deduction:
At the time of credit to the account of payee or actual payment, whichever is earlier
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✅ Due Date for TDS Deposit:
By 7th of the following month (except for March – 30th April)
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✅ Example:
A company pays a Chartered Accountant ₹50,000 for audit work:
Since the amount > ₹30,000, TDS applies.
TDS = 10% of ₹50,000 = ₹5,000
Deduct TDS and deposit with the government.
TDA 194 I
📘 Section 194-I – TDS on Rent
Section 194-I of the Income Tax Act, 1961 deals with TDS on rent payments made to a resident.
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✅ What is "Rent" under Section 194-I?
"Rent" includes payments (under lease, sub-lease, tenancy, or agreement) for use of:
Land
Building (including factory building)
Land appurtenant to a building
Machinery
Plant
Equipment
Furniture
Fittings
Ownership of the asset is not required — even payments to non-owners are covered.
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✅ Who is liable to deduct TDS?
Any person (individuals/HUF only if liable for tax audit under Section 44AB in previous FY)
Companies, firms, LLPs, trusts, etc.
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✅ TDS Rates under Section 194-I:
Type of Rent TDS Rate
Rent for land, building, furniture or fittings 10%
Rent for machinery, plant or equipment 2%
> ⚠️ If PAN is not provided by the payee → TDS @ 20%
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✅ Threshold Limit:
No TDS if total rent paid or payable during the financial year ≤ ₹2,40,000
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✅ Time of Deduction:
At the time of credit to the payee's account or payment, whichever is earlier
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✅ Due Date to Deposit TDS:
7th of the next month
For March, due date is 30th April
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✅ Example:
If a company pays ₹50,000/month as rent for an office:
Annual rent = ₹6,00,000
TDS = 10% of ₹6,00,000 = ₹60,000 annually
Deduct ₹5,000 monthly as TDS and deposit it accordingly.
TDS Sec 194c
Section 194C of the Income Tax Act, 1961 deals with TDS (Tax Deducted at Source) on
payments to contractors and sub-contractors. Here's a detailed explanation:
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✅ Applicability:
TDS under Section 194C is applicable when any specified person pays any resident contractor
or sub-contractor for carrying out any work (including supply of labor).
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✅ Who is a "Specified Person"?
Central/State Government
Local authority
Company
Co-operative society
Trust
Partnership firm
Any individual/HUF (only if under tax audit in previous financial year)
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✅ What is “Work” under 194C?
Includes:
Advertising
Broadcasting and telecasting
Carriage of goods or passengers by any mode (except railways)
Catering
Manufacturing or supplying a product using material provided by the customer (i.e., job work)
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✅ TDS Rates under Section 194C:
Payee Type TDS Rate
Individual/HUF 1%
Others (Company, Firm) 2%
> If PAN is not provided, TDS at 20% will be applicable.
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✅ Threshold Limits (No TDS if below):
Single contract payment ≤ ₹30,000 → No TDS
Aggregate in financial year ≤ ₹1,00,000 → No TDS
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✅ Time of Deduction:
At the time of credit to the contractor’s account or payment, whichever is earlier.
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✅ Due Date for TDS Deposit:
By 7th of the next month (except March: 30th April)
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✅ Sub-Contractor Payments:
TDS is also applicable when a contractor pays a sub-contractor for part or whole of the work.
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✅ Example:
A company hires a contractor to deliver goods for ₹50,000:
Contractor is an individual → TDS = 1% of ₹50,000 = ₹500
TDS deducted at the time of credit/payment.
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Let me know if you want a comparison with Section 194J or 194H, or a summary table.