TDS section 194E
A basic summary of TDS section 194E
In this post we will talk about the TDS Section 194E, including who is responsible for deducting, when to deduct, and more. Let us go over each section in detail:
Section 194E- Introduction
Section 194E addresses income payments to non-resident athletes, entertainers, and sports associations or institutes where the income is reffered u/s 115BBA.
The payer must deduct a 20% income tax (plus HEC and surcharge, if applicable) when the income is credited to the payee’s account or when the payment is made, whichever occurs first.
Nevertheless, no deduction is permitted for any expenses incurred, and no allowance is provided to such assessee under section 115BBA.
The specified income consists of earnings from participating in any games, sports, or performances, as well as income from advertising or contributing articles to newspapers. It is mandatory that all such income arises solely within India.
Who is responsible for deducting tax u/s 194E?
Any person responsible for making the following payments will deduct tax at the source :
|
Payee |
Nature of income |
|
(a) Non-resident citizen sportsperson (including athlete) |
Income is made by:- a) Playing any game in India (except card games and gambling); b) Advertising; or c) Writing articles on any game or sport in India for newspapers, periodicals, or journals. |
|
(a) Non-resident sports institutions or associations. |
Any money guaranteed to be paid or payable in connection with any game (other than card games) or sport performed in India. |
|
(C) A non-resident foreign citizen entertainer. |
His/her income depends on his/her performance in India. |
When to deduct TDS under section 194E?
Income tax must be deducted when the income is placed into the payee’s account or paid, whichever comes first. You can pay in cash, by cheque, draft, or any other way.
What is section 115BBA?
This section defines a 20% tax rate (plus HEC), combined with other charges, for certain incomes of non-resident athletes, entertainers, or sports organisations. They cannot deduct tax on expenditures but may apply for allowances under section 115BBA.
Earnings from games, sports, performances, advertising, and authoring newspaper articles are all covered under TDS as long as the income is earned in India.
Rate of TDS under Section 194E
The tax deduction rate under section 194E is 20% (plus surcharge and Health & Education Cess at 4%).
Return filing
Section 194E of the Income Tax Act 1961 requires the deductor to submit a TDS return in Form 27Q. The TDS return on form 27Q must be filed every quarter within the following mandatory due dates:
Months | Due dates |
April to June | 31st July |
July to September | 31st October |
October to December | 31st January |
January to March | 31st May |
This concludes our discussion of Section 194E. If you have any questions, please post them in the comment section below.
FAQS
1.How do I invest in NSC?
Ans: To invest in NSC, go to the nearest post office.
2.What is TDS 194?
Ans: TDS under section 194 applies to profits covered by section 2(22)(e).
3.What is the NSC scheme?
Ans: The NSC programme is an Indian government savings scheme that is largely used for minor savings and income tax purposes. This is available to purchase at any post office.
4.Is the withdrawal from NSC taxable?
Ans: NSC withdrawals are fully taxable, and they are taxed with other types of income.
