Applicability of Surcharge and Education Cess on TDS [Financial Year 2009-2010]

1.      Surcharge:

No Surcharge on TDS in case of payment is made to Resident or Domestic Company

No Surcharge on TDS in case of payment is made to Non Resident other than Foreign Company

2.5% Surcharge on TDS if the recipient is a foreign company and amount exceeds Rs. 1 Crore.

2.      Education Cess

No EC or SHEC on TDS in case of payment is made to Resident or Domestic Company [Other than Salary]

3% EC and SHEC (2% + 1%) on TDS in case of Salary

3% EC and SHEC (2% + 1%) on TDS in case of payment is made to Non Resident

Authority:  Sub Sections (5), (6) and (7) of Section 2 read with Sub Sections (11) and (12) also read with Part II of First Schedule

See:Chapter 9: Rates of TDS for the Financial Year 2009-2010

 

Surcharge on TDS applies only to foreign companies above a monetary threshold; education cess applies to salary and nonresident payments. Applicability of Surcharge and Education Cess on TDS distinguishes by recipient type and payment nature: no surcharge on TDS for residents, domestic companies or non residents except foreign companies above a monetary threshold; education cess not on TDS for residents/domestic companies (other than salary); education cess applies to salary TDS and to TDS on payments to non residents.