New TDS guidelines

Important: New guidelines regarding TDS deduction on the interest earned in NRO/NRE deposits

In accordance with the changes proposed in the Union Budget 2018 with effective April 01, 2018, Education cess and secondary education cess presently applicable @ 3% has been abolished and replaced with Health and Education Cess applicable @ 4%.

Accordingly, the withholding tax rates for interest earned on NRO savings bank account and Deposits will be as under:

Any interest paid / accrued on or after April 1, 2018 will be subject to the mentioned withholding tax rates.

“With respect to the new provision of section 206AB of the Income Tax Act, 1961, customers having a permanent establishment in India and have not filed Income Tax returns for the last two financial years, where the aggregate TDS/TCS> = INR 50,000, for each financial year, rate of tax will be deducted at the rate specified in the relevant provision of the Act OR at twice the rate or rates in force OR the rate of 5%, whichever is higher. This is effective from July1, 2021”

“As per the recent changes in the Income Tax Laws w.r.t Section 194N - TDS on Cash Withdrawal which are applicable w.e.f. 1st July’2020, there is a change in the threshold limit of INR 1 Crore, wherein customers who have not filed IT Returns for all three assessment years (for which time limit to file return has expired as per the Income Tax Act) immediately preceding the year in which cash withdrawal is being made by the customer, TDS will be applicable as below:”

Disclaimer: The tax write up above is for the general understanding and reference. The user needs to verify all the facts, law and contents with the text of the prevailing statutes and seek appropriate professional advice before acting on the basis of any information contained herein as the taxation implications may vary depending upon the facts in each case/interpretation by tax authorities and the tax laws are subject to change from time to time. ICICI Bank Ltd expressly disclaims any liability to any person, in respect of anything done or omitted to be done by any such person by placing reliance upon the contents of this write-up.