Significant Changes in TDS Rates in Budget 2016-17

Significant Changes in TDS Rates in Budget 2016-17

Under the scheme of deduction of tax at source as provided in the Act, every person responsible for payment of any specified sum to any person is required to deduct tax at source at the prescribed rate and deposit it with the Central Government within specified time. However, no deduction is required to be made if the payments do not exceed prescribed threshold limit.


In order to rationalise the rates and base for TDS provisions, the existing threshold limit for deduction of tax at source and the rates of deduction of tax at source are proposed to be revised as mentioned in table 3 and table 4 respectively.


Table 3: Increase in threshold limit of deduction of tax at source on various payments mentioned in the relevant sections of the Act



Present Section Heads Existing Threshold Limit (Rs.) Proposed Threshod Limit (Rs.)
192A Payment of accumulated  balance due to an employee 30,000 50,000
194BB Winnings from Horse Race 5,000 10,000
194C Payments to Contractors Aggregate  annual limit of 75,000

Aggregate annual limit of 1,00,000

194LA Payment of Compensation on acquisition of certain Immovable Property 2,00,000 2,50,000
194D Insurance commission


20,000 15,000
194G Commission on sale of lottery tickets 1,000 15,000
194H Commission or brokerage 5,000 15,000


Table-4 : Revision in rates of deduction of tax at source on various payments mentioned in the relevant sections of the Act:


Present Section Heads Existing Rate of TDS (%) Proposed Rate of TDS (%)



Payment in respect of Life Insurance Policy








Payments in respect of NSS Deposits








Insurance commission


Rate in force (10%)






Commission on sale of lottery tickets








Commission or brokerage






The following provisions which are not in operation are proposed to be omitted as detailed in Table 5.


Table 5: Certain non-operational provisions to be omitted


Present Section Heads Proposal



Income in respect of Units


To be omitted w.e.f 01.06.2016




Payment of Compensation on acquisition of Capital Asset


To be omitted w.e.f 01.06.2016

These amendments will take effect from 1st June, 2016.

[Clause 70 to 79]



Enabling of Filing of Form 15G/15H for rental payments


The provision of sub-section 194-I of the Act, inter alia, provides for tax deduction at source (TDS) for payments in the nature of rent beyond a threshold limit. The existing provisions provide threshold of Rs. 1,80,000 per financial year for deduction of tax under this section. In spite of providing higher threshold for deduction tax under this section, there may be cases where the tax payable on recipient’s total income, including rental payments , will be nil. The existing provisions of section 197A of the Income-tax Act, inter alia provide that tax shall not be deducted, if the recipient of certain payments on which tax is deductible furnishes to the payer a self- declaration in prescribed Form.No. 15G/15H declaring that the tax on his estimated total income of the relevant previous year would be nil. In order to reduce compliance burden in such cases, it is proposed to amend the provisions of section 197A for making the recipients of payments referred to in section 194-I also eligible for filing self-declaration in Form no 15G/15H for non-deduction of tax at source in accordance with the provisions of section 197A.


This amendment will take effect from 1st June, 2016.

[Clause 84]

21 Major Changes Proposed in the Budget 2016-17

Government proposed following 21 Major Changes in the Budget 2016-17

1.       Registration of Companies should be given in one day – Companies Act proposed to be amended.
2.       Relief under Section 87A proposed to be increased from Rs. 2,000 to Rs. 5,000
3.       Deduction under Section 80GG for individuals paying rent but not receiving HRA proposed to be increased from Rs. 24,000 to Rs. 60,000.
4.       FM increases the turnover limit of presumptive taxation Scheme to 2 crores. Continue reading “21 Major Changes Proposed in the Budget 2016-17”

Every Minute Highlight- Budget 2016-17

Every Minute Highlight- Budget 2016-17

11:33  Most political budget speech in yrs. Tone echoes a hard Agro-povertarian swing. govt seems losing nerve early, say experts. Every Minute Highlight- Budget 2016-17

11:32  Catastrophic health events single largest cause of out of pocket expenditure, pushes people below BPL. Govt to launch new health protections schemed, health cover of Rs 1 lakh per family. Addl top up of Rs 30000 for senior citizens

11:31  Rs 2,000 crore to meet initial cost of proving LPG connections for rural areas. Scheme to continue for 5 years to cover BPL households
Women of India have faced the curse of smoke during cooking, time to remedy this – Jaitley
Over Rs 87,000 crore allocated for rural development.

11:30  Rewards system for rural areas that eliminate open defecation:  Two digital literacy programme will cover 6,000 extra villages
Rs 38,500 crore allocated to MNREGS- Highest ever amount spend in a year

11:29  Rs 38,500 crore allocated for MGNREGA
To provide statutory backing to Aadhar: FM
A unified agriculture platform to be dedicated to the nation on the birth anniversary of BR Ambedkar: FM

A dedicated irrigation fund worth Rs 20,000 crore to be set up under NABARD

First time plan expenditure has increased which is happening due to record public spending in infrastructure

PSU banks gain ahead of Union Budget; SBI up 3%

At start of year, 18,500 villages were not electrified. As of mid-Feb, 5,500 villages have been electrified. 100% rural electrification to be done by May 2018

11:23  FM Jaitley takes Speaker’s suggestion, to read out rest of speech sitting down.
Total allocation for agri and farmer welfare is Rs 35,984 crore
Four new projects for dairy farmers, to costs Rs 850 crore

11:22  Provision of Rs 15,000 crore to ease burden on loan repayment in form on interest subvention for farmers
100 kms road construction per day currently to be stepped up.
Rs 27,000 crore to be spent on roads network

11:21  BSE 23,191.93 +37.63 (+0.16%)
NSE 7,037.65 +7.90 (+0.11%)

11:20  Markets bounce back as Jaitley presents Budget in Parliament.

11:19  Govt implementing a unified market for agri produce, e-platform to be launched after states amend APMC Act. E-platform to be dedicated on Babasaheb Ambedkar’s birth anniversary.

11:19  Rs 500 crore allocated to pulses production.

11:18  Nominal premium and highest ever compensation in case of crop loss under the PM Fasal Bima Yojana: FM

11:17  Global economy has reduced from 3.4% to 3.1% growth. Indian economy has grown to 7.6% while CPI inflation down to 5.4% – Jaitley
Allocation for AIBP at Rs 17,000 crore

11:16  Business Standard Says: FM says public listing of general insurance companies. FY17 could be year of insurance company IPOs. Not even a single domestic insurance company is listed in India yet

11:16  Nominal premium and highest ever compensation in case of crop loss under the PM Fasal Bima Yojana: FM

11:15  Of 141 mn hectares of cultivated area, only 46% covered by irrigation. 28.5 lakh hectares to be brought under new scheme.
Agri and farmers’ welfare: Need to think beyond food security to income security. WIll double income of farmers by 2022. Rs 35, 984 crore allocation

11:14  Agri, rural sector, health sector, education skills and job creation, infra and investment, financial sector reforms, governance and ease of business, fiscal discipline, and tax reform to reduce compliance burden
Will provide for PSU bank recapitalisation in this fiscal.

11:13  Farm, rural sector, infra, social sector to have more Government expenditure: FM
FM says that recapitalization of banks will be done during next FY

11:12  Govt to focus on passing GST and Bankruptcy laws. Statutory backing for Aadhaar platform
Govt to provide addl resource to rural and vulnerable areas
Increasing outlay on social sector programmes, 3 schemes to be focus: Crop Insurance, health insurance scheme for 1/3rd of India and BPL families to be provided with cooking gas connection helped by govt
7th Pay Commission and OROP to put burden on finances

11:11  GDP growth accelerated to 7.4%: FM Arun Jaitley
We have bridged the trust deficit created by the previous government
Our forex reserves are at the highest level
CPI inflation has come down to 5.4% under our government, despite two poor monsoons

These are the Every Minute Highlight- Budget 2016-17(Source

Highlights of Union Budget

Highlights  of Union Budget Presenting the Budget on Monday Finance Minister Arun Jaitley said the Indian economy has weathered the serious global crisis.

Arun Jailtey said despite inheriting a weak economy, the government has turned the adversities into opportunities.

The current account deficit has declined to $14.4 bn dollars, projected 1.4% of GDP.

The growth of GDP has accelerated and inflation has decelerated, Jaitley said. Continue reading “Highlights of Union Budget”