It is general view that there is no change in tds rates w.e.f. 01.10.09. Only threshold limit has been changed. But special attraction is required to those who are making advertising payment as deductor. As earlier post or the TDS table given as below, It can be observed that deduction of tds under section 194C has been changed specifically in case of Payment to Advertiser. As per old practice, deductor is deducting 1% tds while making payment to Advertiser. Now criteria has been changed. It depends upon his Pan Status. If it relates to Individual/H.U.F. than TDS will be deducted 1% (same as earlier) , If advertisers gives Pan Number of his firm/company/trust etc., TDS will be deducted 2%( prior to 01.10.2009, it was 1%).
Status of Pan (Permanent Account Number)
Now, deductor has a question that how can he know that a PAN supplied by deductee relates to Individual/H.U.F. or not ?. It is easy to everyone to find out that It depends upon fourth character of the PAN digits. In case P or H. Pan relates to Individual/H.U.F. and in other case it do no relates to Individual/H.U.F.
Example
PAN NUMBER = AAAPA2273P (This pan number relates to Individual due to "P" as fourth character in Pan)
TDS Calculator w.e.f. 01.10.2009 | |||||
Financial Year 2010-11 (Assessment Year 2011-12) | |||||
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Tax Deduction at Source (Rates) | |||||
Enter Bill Amount |  | 515800 | |||
Section | Nature of Payment | Threshhold Limit | TDS % | TDS (Amount) | |
01-10-09 to 30-06-10 | 01-07-10 to onwards | ||||
194-A | Interest from Bank | 10000 | 10000 | 10 | 51580 |
194-A | Interest Others | 5000 | 5000 | 10 | 51580 |
194-B | Winning from Lotteries | 5000 | 10000 | 30 | 154740 |
194-BB | Winning from Horse Races | 2500 | 5000 | 30 | 154740 |
194-C | Contractor/Sub Contractor including Advertisor | ||||
1) To Individual/H.U.F. | (a) 20000 as single (b) 50000 in a year | (a) 30000 as single (b) 75000 in a year | 1 | 5158 | |
2) To Other than Individual/H.U.F. | 2 | 10316 | |||
3) To Transporters (If Pan is Furnished) | 0 | 0 | |||
194-D | Insurance Commission | 5000 | 20000 | 10 | 51580 |
194-H | Commission or Brokerage | 2500 | 5000 | 10 | 51580 |
194-I | 120000 | 180000 | 10 | 51580 | |
(2) Plant,Machinery & Equipment | 120000 | 180000 | 2 | 10316 | |
194-J | Profesional or Technical Services | 20000 | 30000 | 10 | 51580 |
Note :- Surcharge and Education Cess has been removed w.e.f. 01.10.2009 | |||||
Note :- If pan is not provided, 20% TDS will be deducted w.e.f. 01.04.10 u/s 206AA | |||||
As per section 194C (6)
(6) No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, on furnishing of his Permanent Account Number, to the person paying or crediting such sum
Read complete section regarding 194C in the words as per Income Tax Act (Click Here)