Budget 2021-22 + FINANCE Bill, 2021

Rates for deduction of income-tax at source during the financial year (FY) 2021-22 from certain incomes other than“Salaries”.

The rates for deduction of income-tax at source during the FY 2021-22 under the provisions of section 193, 194A, 194B, 194BB, 194D, 194LBA, 194LBB, 194LBC and 195 have been specified in Part II of the First Schedule to the Bill. The rates will remain the same as those specified in Part II of the First Schedule to the Finance Act, 2020, for the purposes of deduction of income-tax at source during the FY 2020-21. For sections specifying the rate of deduction of tax at source, the tax shall continue to be deducted as per the provisions of these sections.

Surcharge-

The amount of tax so deducted shall be increased by a surcharge,-

(a) in the case of every individual or HUF or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Act, being a non-resident, calculated,-

(i) at the rate of ten per cent. of such tax, where the income or aggregate of income (including the income by way of dividend or income under the provisions of sections 111A and 112A of the Act) paid or likely to be paid and subject to the deduction exceeds fifty lakh rupees but does not exceed one crore rupees;

(ii) at the rate of fifteen per cent. of such tax, where the income or aggregate of income (including the income by way of dividend or income under the provisions of sections 111A and 112A of the Act)paid or likely to be paid and subject to the deduction exceeds one crore rupees but does not exceed two crore rupees;

(iii) at the rate of twenty-five per cent. of such tax, where the income or aggregate of income (excluding the income by way of dividend or income under the provisions of sections 111A and 112A of the Act) paid or likely to be paid and subject to the deduction exceeds two crore rupees but does not exceed five crore rupees;

(iv) at the rate of thirty-seven per cent. of such tax, where the income or aggregate of income (excluding the income by way of dividend or income under the provisions of sections 111A and 112A of the Act) paid or likely to be paid and subject to the deduction exceeds five crore rupees;

(v) at the rate of fifteen per cent. Of such tax, where the income or aggregate of income (including the income by way of dividend or income under the provisions of section 111A and 112A of the Act) paid or likely to be paid and subject to the deduction exceeds two crore rupees, but is not covered under (iii) and (iv) above

provided that in case where the total income includes any income by way of dividend of income chargeable under section 111A and section 112A of the Act, the rate of surcharge on the amount of income-tax deducted in respect of that part of income shall not exceed fifteen per cent.

(b) in the case of every co-operative society or firm, being a non-resident, calculated at the rate of twelve per cent. of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds one crorerupees;

(c) in the case of every company, other than a domestic company, calculated,-

(i) at the rate of two per cent. of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds one crore rupees but does not exceed ten crorerupees;

(ii) at the rate of five per cent. of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds ten crorerupees.

No surcharge will be levied on deductions in other cases.

(2) Education Cess-

“Health and Education Cess” shall continue to be levied at the rate of four per cent. of income tax including surcharge wherever applicable, in the cases of persons not resident in India including company other than a domestic company.

 

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Full Text:

Budget 2021-22 + FINANCE Bill, 2021

Tax withholding for non-salary incomes: surcharge and cess adjustments affect non-resident and company payees during fiscal year period. Rates for deduction of income-tax at source on non-salary incomes for FY 2021-22 remain as specified in Part II of the First Schedule to the Finance Bill, 2021, unchanged from the prior year; applicable statutory sections continue to govern deduction. A graduated surcharge applies to TDS for specified non-resident recipients, companies and certain entities with caps for dividend and specially taxed income components, and a Health and Education Cess is levied on income tax including surcharge for non-residents and foreign companies.