TDS, TCS rates on interest, dividend, other non-salary payments effective April 1, 2021

In May 2020, the government reduced TDS and TCS rates for interest income, dividend income, rent payments and other non-salary payments by 25%. This was done to increase liquidity in the hands of individuals, especially those going through financial hardships caused by the coronavirus-induced lockdown. Reduction in TDS and TCS rates on non-salary payments came into effect on May 14, 2020, and will be applicable till March 31, 2021.

So, effective from April 1, 2021, the TDS and TCS rates on these non-salary payments will be back to their original (higher) levels.

This would mean that, for example, if the interest paid on a bank fixed deposit exceeds Rs 40,000 between April 1, 2021, and March 31, 2022, then the bank would deduct tax on the interest paid at the rate of 10% instead of 7.5% in the previous financial year 2020-21.


Given below are the TDS rates applicable from April 1, 2021:

Nature of payment	Section of the Income-tax Act	TDS rate effective from April 1, 2021
Receiving accumulated taxable part of PF	Section 192A	10%
Interest received on securities	Section 193	10%
Dividend received from Mutual funds and on the company's shares	Section 194 and 194K	10%
Interest other than Interest on Securities e.g. Fixed deposit interest	Section 194A	10%
Winnings from a lottery, crosswords or any sort of game	Section 194B	30%
Winnings from horse races	Section 194BB	30%
Insurance Commission received by an Individual	Section 194D	5%
Life Insurance Policies not exempt under Section 10(10D)	Section 194DA	5%
Commission or brokerage received except for Insurance Commission	Section 194H	5%
Payment made while purchasing land or property	Section 194IA	1%
Payment of rent by individual or HUF exceeding Rs. 50,000 per month	Section 194IB	5%
Payment made to professional or commission or brokerage of more than Rs 50 lakh and above	194M	5%
Cash withdrawal exceeding Rs 20 lakh or Rs 1 crore as the case maybe	194N	2%
Payment of Professional Fees etc.	194J	2%(FTS, certain royalties, call centre) 10%(others)
Payment in respect of deposits under National Savings Scheme	194EE	10%
Rent for plant and machinery	194- I(a)	2%
Rent for immovable property	194-I(b)	10%

TCS rates effective from April 1, 2021:

Nature of receipts	Section of the Income-tax Act	TCS rates effective from April 1, 2021
Sale of Tendu Leaves	206C(1)	5.00%
Sale of Timber obtained under a forest lease	206C(1)	2.50%
Sale of timber obtained by any other mode	206C(1)	2.50%
Sale of Any other forest produce not being timber/tendu leaves	206C(1)	2.50%
Sale of scrap	206C(1)	1.00%
Sale of Minerals, being coal or lignite or iron ore	206C(1)	1.00%
Grant of the license, lease, etc. of Parking lot	206C(1)	2.00%
Grant of license, lease, etc. of Toll Plaza	206C(1)	2.00%
Grant of license, lease, etc. of Mining and quarrying	206C(1)	2.00%
Sale of motor vehicle above 10 lakhs	206C(1F)	1.00%
Sale of any other goods	206C(1H)	0.1%