# Crux of TDS – Sections 192 to 194BB

This is a consolidated reference of frequently-tested TDS provisions. Each row identifies the Payer, Payee, Nature of Payment, Threshold Limit below which no TDS is required, and the Rate of deduction.

## 1. Section 192 – TDS on Salary

Payer: Employer
Payee: Employee
Nature of payment: Salary
Threshold limit: Basic Exemption Limit applicable to the employee (₹2,50,000 / ₹3,00,000 / ₹5,00,000 depending on age/regime)
Rate of TDS: Average rate of income tax computed on estimated total salary for the year (slab rates)

## 2. Section 192A – TDS on Premature Withdrawal from EPF

Payer: Any person (trustee of EPF scheme)
Payee: Employee
Nature of payment: Accumulated balance of EPF withdrawn before 5 years of continuous service
Threshold limit: ₹50,000
Rate: 10%

## 3. Section 193 – TDS on Interest on Securities

Payer: Any person
Payee: Resident person
Nature of payment: Interest on securities
Threshold limit: ₹10,000 p.a.
Rate: 10%

## 4. Section 194 – TDS on Dividend

Payer: Domestic Company
Payee: Resident person
Nature of payment: Dividend (other than dividend paid in cash)
Threshold limit: ₹10,000 p.a.
Rate: 10%

## 5. Section 194A – TDS on Interest other than Interest on Securities

Payer: Any person except Individual/HUF whose turnover in the immediately preceding year did not exceed:
₹1 crore (in case of business), or
₹50 lakh (in case of profession)
Payee: Resident person
Threshold limits:
Interest paid by a Bank / Post Office on time deposits: ₹50,000 (₹1,00,000 for senior citizens – check current limit)
Interest paid by any other person: ₹10,000
Rate: 10%

## 6. Section 194B – TDS on Winnings from Lottery, Crossword Puzzle, Card Game, etc.

Payer: Any person
Payee: Any person
Nature of payment: Winnings from lottery, crossword puzzle, card game, etc.
Threshold limit: ₹10,000 (per single transaction/winning)
Rate: 30% (flat – no slab benefit, no surcharge/cess on TDS rate itself)

## 7. Section 194BB – TDS on Winnings from Horse Race

Payer: Any person (typically book-maker / licensee)
Payee: Any person
Nature of payment: Winnings from horse race
Threshold limit: ₹10,000
Rate: 30%

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## Memory Aids

Section	Payment	Threshold	Rate
192	Salary	Basic Exemption Limit	Slab (average)
192A	EPF (premature)	₹50,000	10%
193	Interest on securities	₹10,000	10%
194	Dividend (non-cash)	₹10,000	10%
194A	Other interest	₹50,000 (bank/PO TD) / ₹10,000 (others)	10%
194B	Lottery/puzzle winnings	₹10,000	30%
194BB	Horse race winnings	₹10,000	30%

Tip: Sections 192 and 192A both deal with employment-linked payments. Section 192 is on regular salary at slab/average rate; Section 192A is on premature EPF withdrawal at a flat 10%.

Worked example

### Example 1

Example 1 (Sec 192 – Salary): Mr. A's estimated salary for FY is ₹9,00,000. His estimated tax liability (under old regime, after deductions) is ₹54,600. The employer must deduct TDS each month based on the average rate = ₹54,600 / ₹9,00,000 = 6.07%. Monthly TDS ≈ ₹4,550.

### Example 2

Example 2 (Sec 192A – EPF): Mr. B withdraws ₹2,00,000 from EPF after 3 years of service (without furnishing PAN-linked Form 15G/15H). Since amount > ₹50,000 and service < 5 years, TDS @ 10% = ₹20,000 will be deducted.

### Example 3

Example 3 (Sec 194A – Bank Interest): Mr. C (age 45) earns ₹62,000 interest on a bank FD during the year. Threshold for non-senior is ₹50,000 (assumed). Since ₹62,000 > ₹50,000, TDS @ 10% on entire ₹62,000 = ₹6,200.

### Example 4

Example 4 (Sec 194B – Lottery): Ms. D wins ₹1,50,000 from a state lottery. TDS @ 30% on ₹1,50,000 = ₹45,000. She receives ₹1,05,000 in hand. No basic exemption is available against this income.

### Example 5

Example 5 (Sec 194 – Dividend): XYZ Ltd., a domestic company, declares dividend of ₹15,000 to a resident shareholder Mr. E (paid by cheque/credit, not cash). Since amount > ₹10,000, TDS @ 10% = ₹1,500 must be deducted.

⚠️ Common exam mistakes

Applying slab rate under Section 194B (lottery winnings) – the rate is a flat 30%, with no basic exemption or deductions allowed against this income.
Forgetting that under Section 194A, an Individual/HUF is NOT liable to deduct TDS unless their turnover/gross receipts in the immediately preceding year exceeded ₹1 crore (business) or ₹50 lakh (profession).
Confusing Section 192 (salary, average rate) with Section 192A (premature EPF withdrawal, flat 10%).
Applying Section 194 (dividend TDS) on dividend paid in cash – Section 194 specifically applies to dividend other than cash. Cash dividends are largely restricted under the Companies Act anyway.
Using wrong threshold under Section 194A – ₹50,000 applies only to interest from banks/cooperative banks/post offices on time deposits; for other payers (e.g., company interest), the threshold is only ₹10,000.
Forgetting that the threshold under Section 192 is the basic exemption limit of the employee (which varies with age and regime opted), not a fixed amount.
Treating Section 192A threshold as ₹30,000 (old limit) – the correct current limit is ₹50,000.
Computing TDS on the excess over threshold under Section 194A/193 – once the threshold is crossed, TDS is on the entire amount, not just the excess.

Bare-Act text Sections 192, 192A, 193, 194, 194A, 194B, 194BB · Income-tax Act, 1961 · click to expand

Section 192(1): Any person responsible for paying any income chargeable under the head 'Salaries' shall, at the time of payment, deduct income-tax on the amount payable at the average rate of income-tax computed on the basis of the rates in force for the financial year in which the payment is made, on the estimated income of the assessee under this head for that financial year. Section 192A: Notwithstanding anything contained in this Act, the trustees of the Employees' Provident Fund Scheme, 1952, or any person authorised under the scheme to make payment of accumulated balance due to employees, shall, in a case where the accumulated balance due to an employee participating in a recognised provident fund is includible in his total income owing to the provisions of rule 8 of Part A of the Fourth Schedule not being applicable, at the time of payment of the accumulated balance due to the employee, deduct income-tax thereon at the rate of ten per cent. Section 194B: The person responsible for paying to any person any income by way of winnings from any lottery or crossword puzzle or card game and other game of any sort … shall, at the time of payment thereof, deduct income-tax thereon at the rates in force.

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Crux of TDS – Quick Reference Table (Sections 192, 192A, 193, 194, 194A, 194B, 194BB)

Worked example

⚠️ Common exam mistakes