{"id":4763,"date":"2021-06-28T18:43:12","date_gmt":"2021-06-28T13:13:12","guid":{"rendered":"https:\/\/razorpay.com\/learn\/?p=4763"},"modified":"2022-12-21T15:41:28","modified_gmt":"2022-12-21T10:11:28","slug":"key-tds-rate-changes","status":"publish","type":"post","link":"https:\/\/razorpay.com\/learn\/business-banking\/key-tds-rate-changes\/","title":{"rendered":"Key TDS Rate Changes Effective from 1st July 2021"},"content":{"rendered":"

The new TDS rates<\/a> as amended by the Finance Act 2021 will be effective from 1st July 2021. These rules relay that tax deduction or tax collection will be carried out at a higher rate in case certain businesses fail to file their income tax returns.\u00a0\u00a0<\/span>
\n<\/span><\/p>\n

Here is everything you need to know about the changes<\/span><\/p>\n

TDS on Purchase of Goods: Section 194Q<\/b><\/h2>\n

A new section 194Q for TDS on purchase of goods has been introduced, which will be effective from 1st July 2021 with the following rules – <\/span>
\n<\/span>
\n<\/span>(1) If a purchaser’s turnover in the previous year exceeded Rs.10 crore and the purchases are worth more than Rs.50 lakh from a seller in the current year, they will be required to deduct TDS from 1st July 2021. <\/span>
\n<\/span>
\n<\/span>(2) TDS will be deducted at a rate of 0.1% on purchases above Rs. 50 lakh. However, if the vendor does not furnish a PAN, TDS will be deducted at a rate of 5%. <\/span>
\n<\/span>
\n<\/span>(3) If TDS is deductible under any other provision or TCS is recoverable other than TCS u\/s 206C(1H), i.e. on sale of goods, the provisions of this section will not apply.<\/span>
\n<\/span>
\n<\/span>Please note that the above provisions of section 194Q are not applicable when the seller is a non-indian resident.<\/span><\/p>\n

Pay TDS now<\/a><\/div>\n

 <\/p>\n

High TDS rate for ITR non-filers <\/b><\/b><\/h2>\n

Section 206AB demands the tax deductor to verify whether the vendor has filed their ITR for the previous 2 financial years if the TDS amount exceeds Rs. 50,000. <\/span>Businesses and individuals can check if the vendor is TDS compliant by <\/span>submitting the 10-digit PAN (Permanent Account Number) on the <\/span>Income-tax portal<\/span><\/a>.<\/span>
\n<\/span>
\n<\/span>In case the ITR has not been submitted, TDS will be deducted at twice the existing rate, or at 5% rate, whichever rate is higher. Meanwhile, for TCS collection, it will be double the rate mentioned in 206 CCA; or 5 %, whichever is highest.\u00a0<\/span><\/p>\n

Income from salary, payments to provident funds (PF), TDS applicable on lotteries, and horse racing earnings have been exempted from the new TDS norms. <\/span><\/em>
\n<\/span>
\n<\/span>We hope this helps you plan your TDS payments smoothly for the month of July.\u00a0<\/span><\/p>\n

Pay TDS on time & avoid late penalties\u00a0<\/b><\/h2>\n

Make your monthly TDS payments in 30 seconds and in under 3 steps, completely FREE on our new TDS Payment tool. <\/span>
\n<\/span>
\n<\/span>–<\/span> No sign-up required<\/span>
\n<\/span>– Completely free<\/span>
\n<\/span>– Trusted by top Indian CAs <\/span>
\n<\/span>– 100% secure payments<\/span><\/p>\n

Pay TDS now<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

Read on to know all the key TDS rate changes businesses need to take into account from 1st July 2021. <\/p>\n","protected":false},"author":151156479,"featured_media":4766,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3437],"tags":[],"class_list":{"0":"post-4763","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-banking"},"_links":{"self":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/4763","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/users\/151156479"}],"replies":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/comments?post=4763"}],"version-history":[{"count":7,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/4763\/revisions"}],"predecessor-version":[{"id":7251,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/4763\/revisions\/7251"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/media\/4766"}],"wp:attachment":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/media?parent=4763"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/categories?post=4763"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/tags?post=4763"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}