Every person is responsible for deduct tax at source on the payment of any specified amount to any person at the specified rates, if it is above the prescribed limit by income tax act. Each section has its own prescribed limit to deduct tax at source (TDS). However, no need to deduct tax at source (TDS) if the amount paid don’t be exceed to prescribed threshold limit by that particular section. So as per finance bill 2010 the prescribed threshold limit has increased and changed. The applicability date of changed threshold limit is July 1, 2010.
As per Finance Minister’s speech in budget 2010
In order to adjust for inflation and also to reduce the compliance burden of deductors and taxpayers, it is proposed to raise the threshold limit for payments mentioned in sections 194B, 194BB, 194C, 194D, 194H, 194-I and 194J as under:
| Sl. No. | Section | Nature of payment | Existing threshold limit of payment (Rupees) | Proposed threshold limit of payment (Rupees) |
| 1. | 194B | Winnings from lottery or crossword puzzle | 5,000 | 10,000 |
| 2. | 194BB | Winnings from horse race | 2,500 | 5,000 |
| 3. | 194C | Payment to contractors | 20,000
(for a single transaction) |
30,000
(for a single transaction) |
| 50,000
(for aggregate of transactions during financial year) |
75,000
(for aggregate of transactions during financial year) |
|||
| 4. | 194D | Insurance commission | 5,000 | 20,000 |
| 5. | 194H | Commission or Brokerage | 2,500 | 5,000 |
| 6. | 194-I | Rent | 1,20,000 | 1,80,000 |
| 7. | 194J | Fees for professional or technical services | 20,000 | 30,000 |
These amendments are proposed to take effect from 1st July, 2010.
Related posts:
- Tax Audit Limit Increased after Budget 2010
- Summary of TDS Amendments Applicable for A.Y. 2011-12
- Limit of wealth tax increased
- Changes of TDS in Union Budget 2009 | TDS Amendments applicable for A.Y.2010-11
- Income Tax Exemption Limit Increased | Union Budget 2009 Taxation Highlights
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{ 11 comments… read them below or add one }
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