Chapter 13: Deduction, Collection & Recovery of Tax (TDS/TCS)
1. Fast-Track TDS Master Matrix (High-Yield Provisions)
| Sec (2025) | Sec (1961) | Nature of Payment | Threshold Limit | Standard Rate |
|---|---|---|---|---|
| Sec 392 | Sec 192 | Salaries | Basic exemption limit | Average slab rate |
| Sec 393(1) | Sec 194A | Interest other than securities (Bank/NBFC) | ₹ 40,000 (₹ 50,000 for Senior Citizens) | 10% |
| Sec 393(1) | Sec 194C | Contractors & Sub-contractors | Single: ₹ 30,000; Aggregate: ₹ 1,00,000 | 1% (Ind/HUF) / 2% (Others) |
| Sec 393(1) | Sec 194H | Commission or Brokerage | ₹ 15,000 | 2% (reduced from 5%) |
| Sec 393(1) | Sec 194-I | Rent (Land, Building, Furniture) | ₹ 2,40,000 p.a. | 10% (2% for Plant & Mach) |
| Sec 393(1) | Sec 194-IA | Transfer of Immovable Property | ₹ 50,00,000 (Consideration or SDV) | 1% of higher of price or SDV |
| Sec 393(1) | Sec 194J | Professional Fees / Technical Fees | ₹ 30,000 | 10% (Prof) / 2% (Tech/Call center) |
| Sec 393(1) | Sec 194Q | Purchase of Goods by large buyer (Turnover > ₹ 10 Cr) | ₹ 50,00,000 in a FY | 0.1% |
| Sec 393(1) | Sec 194R | Benefit or Perquisite arising from business/profession | ₹ 20,00,000 in a FY | 10% |
| Sec 393(1) | Sec 194T | Remuneration, salary, bonus, interest to Partners | ₹ 20,000 aggregate in a FY | 10% |
| Sec 393(3) | Sec 194BA | Net Winnings from Online Games | No minimum threshold | 30% on net winnings |
2. TCS Master Schedule (Section 394 / Sec 206C)
| Good / Transaction Description | Threshold Limit | TCS Rate (FA 2026 Amended) |
|---|---|---|
| Alcoholic Liquor for human consumption | Nil | 2% (reduced from 1%) |
| Tendu Leaves | Nil | 2% (reduced from 5%) |
| Scrap & Waste | Nil | 2% (increased from 1%) |
| Minerals (Coal, lignite, iron ore) | Nil | 2% (increased from 1%) |
| Motor Vehicle (Sale consideration > ₹ 10 Lakhs) | ₹ 10,00,000 per vehicle | 1% |
| LRS Remittance (Education / Medical treatment) | Amount exceeding ₹ 10 Lakhs | 2% |
| LRS Remittance (Any other purpose) | Amount exceeding ₹ 10 Lakhs | 20% |
| Overseas Tour Program Package | Nil (Flat on entire amount) | 2% (flat rate w.e.f. 1-4-2026) |
| Sale of Goods (Turnover > ₹ 10 Cr and Sales > ₹ 50 Lakhs) | Amount exceeding ₹ 50 Lakhs | 0.1% |
3. Advance Tax Instalment Schedules (Section 211)
| Due Date of Instalment | All Corporate & Non-Corporate Assessees | Presumptive Assessees (44AD / 44ADA) |
|---|---|---|
| On or before 15th June | Not less than 15% of Advance Tax | Nil |
| On or before 15th September | Not less than 45% of Advance Tax | Nil |
| On or before 15th December | Not less than 75% of Advance Tax | Nil |
| On or before 15th March | 100% of Advance Tax | 100% in single instalment |
Advance tax is payable if estimated tax liability of the previous year is ₹ 10,000 or more.
Resident Senior Citizen Exemption: Senior citizen ($\ge 60$ yrs) having no income under PGBP is exempt from advance tax!
Resident Senior Citizen Exemption: Senior citizen ($\ge 60$ yrs) having no income under PGBP is exempt from advance tax!
4. Interest Framework (Sections 234A, 234B & 234C)
| Section | Default Event | Rate & Period of Interest |
|---|---|---|
| Sec 234A | Delay in filing Return of Income beyond 139(1) due date | 1% per month (or part of month) on assessed tax less advance tax/TDS, from day after due date to date of filing. |
| Sec 234B | Failure to pay Advance Tax or advance tax paid < 90% of assessed tax | 1% per month from 1st April of AY to date of determination of income u/s 143(1) or regular assessment. |
| Sec 234C | Deferment / Shortfall in payment of individual advance tax instalments | 1% per month for 3 months on shortfall below 12% (June), 36% (Sept), 75% (Dec); and 1% for 1 month on shortfall below 100% (March). |
5. High-Frequency Exam Traps
Trap 1: Sec 194Q vs Sec 206C(1H) Conflict Hierarchy!
If a transaction attracts both Section 194Q (buyer TDS) and Section 206C(1H) (seller TCS), Section 194Q PREVAILS! The buyer must deduct TDS @ 0.1%, and seller will NOT collect TCS!
If a transaction attracts both Section 194Q (buyer TDS) and Section 206C(1H) (seller TCS), Section 194Q PREVAILS! The buyer must deduct TDS @ 0.1%, and seller will NOT collect TCS!
Trap 2: Partner Remuneration TDS u/s 194T!
Under Section 194T, the firm must deduct TDS @ 10% on salary, remuneration, commission, or interest paid to a partner if aggregate exceeds ₹ 20,000 in a FY!
Under Section 194T, the firm must deduct TDS @ 10% on salary, remuneration, commission, or interest paid to a partner if aggregate exceeds ₹ 20,000 in a FY!