Tax Deduction at Source sets prescribed withholding rates for various resident payments including salary, interest, dividends, services.

Prescribes withholding rates for tax deduction at source from payments to resident deductees: salary withheld at the average income tax rate on salary; works contracts, service contracts, broadcasting/telecasting, and supply of labour at one per cent; advertising and carriage other than railways at one per cent; interest, most dividends, commission/brokerage/remuneration, professional or technical fees, royalty/non-compete fees, compensation on compulsory acquisition of non agricultural immovable property, and any other income at ten per cent; rent for machinery at one per cent and for land/building/furniture at ten per cent; winnings from lotteries, puzzles, games and horse races at thirty per cent, with definitions extending "contract", "broadcasting and telecasting" and "service contract" accordingly.

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