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TDS surcharge limit

vinayak Parkar (Accounts exe) (92 Points)

30 August 2010

Can anybody tell me is surcharge applicable on TDS other than salary income?

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CA. BIJENDER KR. BANSAL (ACA, B.COM) (8143 Points)
Replied 30 August 2010

No Surcharge and Cess on TDS, in case of Non-Salaries

Finance Act (2) of 2009 comes with major amendment in TDS provisions, where it withdraws additional deductions of surcharge and cess for Non-Salaried, Resident Payments. This would give a slight relax to the deductors in calculating the rate of tax.

Applicable only on Non-Salaried, Resident Payments
The withdrawal of Surcharge and Cess is applicable only for Non Salaried payments, made to Indian Residents.

No Surcharge, But Cess on Salaried Payments
This amendment to Finance Act is not applicable for Salaried DS deductions, where the rate of tax will be determined by the rates in force and increased by Cess. Note that, in case of salaries, Surcharge is not applicable on Individuals from 2009-10 FY, so there is no question of surcharge applicability.

Surcharge Applicability on TDS
For the payments made under sections 193, 194, 194A, 194B, 194BB, 194C, 194D, 194E, 194EE, 194F, 194G, 194H, 194-I, 194J, 194LA, 195, 196B, 196C and 196D, Surcharge should be calculated at the rate of two and half percent, in the case of every company other than a domestic company, in case the amount paid/payable during the financial year exceeds one crore. For other cases, no surcharge has to be made.

The same condition holds for Payments collected u/s 206C (TCS) from company, other than a domestic company and the amount collected/liable for collection in the financial year exceeds one crore.

Applicability of Cess
For the payments made under sections 193, 194, 194A, 194B, 194BB, 194C, 194D, 194E, 194EE, 194F, 194G, 194H, 194-I, 194J, 194LA, 195, 196B, 196C and 196D, Cess should be calculated at the rate of 3% on Tax plus surcharge, provided that, the amount is not being paid to is paid to a domestic company and any other person who is resident in India.

Rate of Surcharge:
The amended rate of surcharge is as under:

Payment made to Company, other than a domestic company
1. Amount paid/payable during the financial year exceeds one crore = 2.5%
2. Below one Crore = ZERO
Payment made to others = ZERO

Rate of Cess:
The amended rate of Cess, including Education cess and Secondary/Higher education cess are as under: