Simplified GST Registration, Speedy Refunds, Export Growth: Major Trade Facilitation Steps

The 56th GST Council Meeting has introduced several important trade facilitation measures aimed at easing compliance, speeding up refunds, supporting small businesses, and strengthening India’s export competitiveness.

These reforms, many of which will be operationalised from 1 November 2025, focus on enhancing efficiency, reducing litigation, and improving ease of doing business under the GST regime.

1. Risk-Based Provisional Refund for Zero-Rated Supplies

To accelerate refund claims on account of exports and supplies to SEZ units/developers, the Council recommended an amendment to Rule 91(2) of the CGST Rules, 2017.

  • 90% of refund will be sanctioned provisionally on the basis of system-based risk evaluation.
  • In exceptional cases, officers may conduct a detailed scrutiny instead of granting provisional refunds.
  • Certain categories of registered persons may be notified as ineligible for provisional refunds.
  • Effective from: 1 November 2025.

This will provide significant liquidity relief to exporters and SEZ suppliers.

2. Provisional Refund for Inverted Duty Structure (IDS)

Currently, provisional refunds are available only for zero-rated supplies. The Council has extended this facility to refunds arising from the Inverted Duty Structure (IDS).

  • 90% of refund will be provisionally sanctioned, subject to risk evaluation.
  • Pending amendment to Section 54(6) of CGST Act, 2017, the CBIC will issue instructions to field formations to implement this system.
  • Effective from: 1 November 2025.

This move will ease cash flow blockages for businesses impacted by IDS.

3. Refunds for Low-Value Export Consignments

The Council recommended amending Section 54(14) of CGST Act, 2017 to remove the threshold limit for refund claims arising from exports with tax payment.

  • Particularly beneficial for small exporters using courier and postal channels.
  • Ensures a level playing field for micro and small exporters.

4. Simplified GST Registration Scheme for Small and Low-Risk Businesses

A new optional simplified registration scheme has been approved:

  • Auto-approval within 3 working days for low-risk applicants.
  • Eligibility: Output tax liability on supplies to registered persons not exceeding ₹2.5 lakh per month.
  • Flexible: Applicants can voluntarily opt-in or opt-out.
  • Will benefit about 96% of new GST applicants.
  • Effective from: 1 November 2025.

5. Simplified Registration for E-Commerce Suppliers

To ease compliance for small sellers on e-commerce platforms:

  • In-principle approval for a special registration scheme for suppliers selling through E-Commerce Operators (ECOs) across multiple states.
  • Will eliminate the requirement to maintain a principal place of business in each state.
  • Detailed modalities will be placed before the Council in subsequent meetings.

This reform will enable small businesses to scale across India via e-commerce.

6. Amendment in Place of Supply Rules for Intermediary Services

The Council recommended omitting Section 13(8)(b) of IGST Act, 2017.

  • After amendment, place of supply for intermediary services will be determined under Section 13(2) i.e., location of the recipient.
  • This change will allow Indian service providers acting as intermediaries to qualify their services as exports, enabling them to claim export benefits.

7. Reform in Post-Sale Discounts

7.1 Legal Amendments

  • Section 15(3)(b)(i) of CGST Act, 2017 to be omitted, removing the requirement of pre-agreed discount conditions.
  • Discounts will be valid if passed through credit notes under Section 34.
  • Recipients must reverse ITC proportionately when value of supply is reduced via credit note.
  • Section 34 will be amended to link it with Section 15(3)(b).
  • Circular No.212/6/2024-GST (dated 26 June 2024) will be rescinded.

7.2 Clarifications via Circular

To avoid litigation, the Council recommended clarifications on:

  • No ITC reversal for discounts issued via financial/commercial credit notes.
  • Treatment of manufacturer-to-dealer discounts as additional consideration in dealer-to-customer transactions.
  • Post-sale discounts as consideration in lieu of promotional activities undertaken by dealers.

8. RSP-Based Valuation for Tobacco Products

The Council recommended Retail Sale Price (RSP)-based valuation under GST for:

  • Pan Masala
  • Cigarettes
  • Gutkha
  • Chewing Tobacco
  • Zarda
  • Scented Tobacco
  • Unmanufactured Tobacco

Amendments in CGST Rules, 2017 and relevant notifications will be carried out to operationalise this change.

The trade facilitation measures announced by the 56th GST Council Meeting mark a transformational shift towards a faster, simpler, and fairer GST system.

  • Exporters and businesses impacted by IDS gain timely liquidity through risk-based provisional refunds.
  • Small businesses benefit from simplified registration schemes, especially those in e-commerce.
  • Amendments on intermediary services and post-sale discounts reduce litigation and provide certainty.
  • RSP-based valuation for tobacco ensures greater compliance and revenue integrity.

Collectively, these measures aim to boost ease of doing business, improve transparency, and support India’s trade ecosystem under GST.

GST Revisions on Service Sector – Works Contracts, Passenger & Goods Transportation, Hotels, Local Delivery, Job Work, Beauty & Wellness, Entertainment, Insurance and More

The 56th GST Council meeting has brought a series of important changes in the services sector, covering works contracts, passenger and goods transport, hotel accommodation, local delivery, job work, beauty & wellness services, entertainment, insurance, and more.

These rate revisions, effective from 22nd September 2025, are designed to rationalise taxation, reduce burden in essential sectors, and align GST with economic realities. Below is a detailed sector-wise breakdown.

1. Construction Sector

S. No. Entry From To
1 Composite supply of works contract and associated services in respect of offshore oil & gas exploration and production 12% with ITC 18% with ITC
2 Works contract predominantly involving earth work (>75%) provided to Government 12% with ITC 18% with ITC
3 Sub-contractor services to main contractor for above works to Government 12% with ITC 18% with ITC

2. Transportation Sector

S. No. Entry From To
1 Air transport of passengers (other than economy class) 12% with ITC 18% with ITC
2 Passenger transport by motor vehicle (fuel cost included) 5% with ITC of input services 12% with ITC → 18% with ITC
3 Transport of goods in containers by rail (other than Indian Railways) 12% with ITC 5% without ITC / 18% with ITC
4 Transportation of petroleum crude, natural gas, HSD, ATF through pipeline 5% without ITC 12% / 18% with ITC
5 GTA services 5% without ITC 12% / 18% with ITC
6 Renting of passenger motor vehicle (with fuel cost included) 5% with ITC of input services 12% / 18% with ITC
7 Renting of goods carriage (with fuel cost included) 12% with ITC 5% with ITC of input services / 18% with ITC
8 Multimodal transport within India 12% with ITC 5% (restricted ITC) / 18% with ITC

3. Job Work Sector

S. No. Entry From To
1 Job work for umbrellas 12% with ITC 5% with ITC
2 Printing of goods under Ch. 48/49 (12% goods) 5% / 12% with ITC 5% with ITC
3 Job work in relation to bricks (5% goods) 12% with ITC 5% with ITC
4 Job work for pharma goods (Ch. 30) 12% with ITC 5% with ITC
5 Job work for hides, skins, leather (Ch. 41) 12% with ITC 5% with ITC
6 Residual job work not elsewhere covered 12% with ITC 18% with ITC

4. Local Delivery Services

S. No. Entry From To
1 Local delivery services (courier/postal type) 18% with ITC 18% with ITC (no change)
2 Local delivery via E-Commerce Operator (ECO) Not notified under Sec. 9(5) To be notified @18%

5. Other Services

S. No. Entry From To
1 Third-party insurance of goods carriage 12% with ITC 5% with ITC
2 Exhibition of films (ticket ≤ ₹100) 12% with ITC 5% with ITC
3 Effluent treatment by CETP 12% with ITC 5% with ITC
4 Biomedical waste treatment 12% with ITC 5% with ITC
5 Hotel accommodation ≤ ₹7500/day 12% with ITC 5% without ITC
6 Professional/technical services for oil & gas exploration 12% with ITC 18% with ITC
7 Support services for oil & gas exploration 12% with ITC 18% with ITC
8 Beauty & physical well-being services (SAC 99972) 18% with ITC 5% without ITC

6. High Tax Bracket (28% → 40%)

S. No. Entry From To
1 Admission to casinos, race clubs, IPL, etc. 28% with ITC 40% with ITC
2 Licensing of bookmakers by race clubs 28% with ITC 40% with ITC
3 Leasing/rental services of goods (previously 28%) 28% with ITC 40% with ITC
4 Specified actionable claims (betting, gambling, online gaming, lottery, horse racing) 28% with ITC 40% with ITC

7. Exemptions

S. No. Entry From To
1 Individual health insurance (and reinsurance) 18% with ITC Exempt
2 Individual life insurance (and reinsurance) 18% with ITC Exempt

The services sector rate changes reflect two clear policy directions:

  • Relief measures have been provided in essential services like health insurance, hotel accommodation, beauty services, effluent treatment, biomedical waste treatment, and certain job work.
  • At the same time, luxury and non-essential services such as casinos, online gaming, race clubs, and high-value leasing have seen rates increase to 40%, ensuring higher revenue neutrality after abolition of compensation cess.

Overall, these rationalisations aim to balance affordability for consumers with revenue needs of the government, while simplifying the tax structure.

Revised GST Slabs for Construction, Cement and Handicrafts Industry Following the 56th GST Council Meeting

The 56th GST Council meeting has announced key rationalisations in the construction sector and handicrafts sector. These changes aim to provide relief to essential construction materials while also promoting India’s traditional art and handicrafts industry. The revised rates will come into effect from 22nd September 2025.

Construction Sector

(12% to 5%)

S. No. Chapter / Heading / Sub-heading / Tariff item Description of Goods
1 68 Sand lime bricks or Stone inlay work

(28% to 18%)

S. No. Chapter / Heading / Sub-heading / Tariff item Description of Goods
1 2523 Portland cement, aluminous cement, slag cement, super sulphate cement and similar hydraulic cements, whether or not coloured or in the form of clinkers

Handicrafts Sector

(12% to 5%)

S. No. Chapter / Heading / Sub-heading / Tariff item Description of Goods
1 44, 68, 83 Idols of wood, stone [including marble] and metals [other than those made of precious metals]
2 6802 Statues, statuettes, pedestals; high or low reliefs, crosses, figures of animals, bowls, vases, cups, cachou boxes, writing sets, ashtrays, paper weights, artificial fruit and foliage, etc.; other ornamental goods essentially of stone
3 6913 Statues and other ornamental articles
4 9601 Worked ivory, bone, tortoise shell, horn, antlers, mother of pearl, and other animal carving material and articles of these materials, articles of coral (including articles obtained by moulding)
5 9701 Paintings, drawings and pastels, executed entirely by hand, other than drawings of heading 4906 and other than hand-painted or hand-decorated manufactured articles; collages, mosaics and similar decorative plaques
6 9702 Original engravings, prints and lithographs
7 9703 Original sculptures and statuary, in any material
8 9705 Collections and collectors’ pieces of zoological, botanical, mineralogical, anatomical, historical, archaeological, paleontological, ethnographic or numismatic interest [other than numismatic coins]
9 9706 Antiques of an age exceeding one hundred years
10 3406 Handcrafted candles
11 4202 22, 4202 29, 4202 31 10, 4202 31 90, 4202 32, 4202 39 Handbags including pouches and purses; jewellery box
12 4416, 4421 99 90 Carved wood products, art ware/decorative articles of wood (including inlay work, casks, barrel, vats)
13 4414 Wooden frames for painting, photographs, mirrors etc
14 4420 Statuettes & other ornaments of wood, wood marquetry & inlaid, jewellery box, wood lathe and lacquer work [including lathe and lacquer work, ambadi sisal craft]
15 4503 90 90, 4504 90 Art ware of cork [including articles of sholapith]
16 6117, 6214 Handmade/hand embroidered shawls of sale value exceeding Rs. 2500 per piece
17 6802 Carved stone products (e.g., statues, statuettes, figures of animals, writing sets, ashtray, candle stand)
18 6815 99 90 Stone art ware, stone inlay work
19 691200 10, 691200 20 Tableware and kitchenware of clay and terracotta, other clay articles
20 6913 90 00 Statuettes & other ornamental ceramic articles (incl blue potteries)
21 7009 92 00 Ornamental framed mirrors
22 7018 90 10 Glass statues [other than those of crystal]
23 7020 00 90 Glass art ware [incl. pots, jars, votive, cask, cake cover, tulip bottle, vase]
24 7326 90 99 Art ware of iron
25 7419 80 Art ware of brass, copper/copper alloys, electro plated with nickel/silver
26 7616 99 90 Aluminium art ware
27 8306 Bells, gongs and like, non-electric, of base metal; statuettes, and other ornaments, of base metal; photograph, picture or similar frames, of base metal; mirrors of base metal; (including Bidriware, Panchloga artware, idol, Swamimalai bronze icons, dhokra jaali)
28 9405 10 Handcrafted lamps (including panchloga lamp)
29 9401 50, 9403 80 Furniture of bamboo, rattan and cane
30 9503 Dolls or other toys made of wood or metal or textile material [incl wooden toys of Sawantwadi, Channapatna toys, Thanjavur doll]
31 9504 Ganjifa card
32 9601 Worked articles of ivory, bone, tortoise shell, horn, antlers, coral, mother of pearl, seashell other animal carving material
33 9602 Worked vegetable or mineral carving, articles thereof, articles of wax, of stearin, of natural gums or natural resins or of modelling pastes etc. (including articles of lac, shellac)
34 9701 Hand paintings, drawings and pastels (incl Mysore painting, Rajasthan painting, Tanjore painting, Palm leaf painting, basoli etc)
35 9703 Original sculptures and statuary, in metal, stone or any material
36 4802 Handmade Paper and Paper board

By reducing GST on essential construction materials such as sand lime bricks, stone inlay work, and cement, the Council has aimed to provide relief to the housing and infrastructure sectors.

In the handicrafts sector, the decision to reduce rates to 5% across a wide range of handcrafted items—such as idols, statues, wooden crafts, handmade paper, shawls, paintings, sculptures, and traditional toys—provides a big boost to artisans, craftsmen, and the cottage industry. These measures not only make handicrafts more affordable for consumers but also encourage the preservation and promotion of India’s rich cultural heritage.

Overall, these reforms in construction and handicrafts are expected to stimulate employment, support artisans, and reduce costs in essential sectors, thereby aligning GST with both economic and cultural priorities.

Cars Become Cheaper | Revised GST Rates on Automobiles After the 56th GST Council Meeting

The 56th GST Council meeting has brought one of the most significant changes for the automobile sector since the introduction of GST in 2017. The FAQs released by the government provide clarity on the revised tax structure for cars, effective from 22nd September 2025. The changes aim to simplify the rate structure, remove compensation cess, and ensure transparency for both manufacturers and consumers.

1. GST on Small Cars

 

 

  • Definition of Small Cars:
    • Petrol, LPG, or CNG cars with engine capacity up to 1200 cc and length up to 4000 mm.
    • Diesel cars with engine capacity up to 1500 cc and length up to 4000 mm.
  • New Rate: 18% GST (earlier 28% + cess).
  • Impact: Buyers of hatchbacks and compact sedans will benefit from a significant reduction in overall tax incidence, potentially leading to lower on-road prices.

2. GST on Mid-size and Large Cars, SUVs, and Utility Vehicles

  • Definition:
    • Vehicles exceeding 1500 cc engine capacity OR length exceeding 4000 mm.
    • SUVs, MUVs, MPVs, XUVs with ground clearance of 170 mm and above also included.
  • New Rate: 40% GST (no separate cess).
  • Earlier Tax: 28% GST + 17–22% cess (total ~45–50%).
  • Impact: Tax incidence remains roughly the same, but merging cess into GST simplifies compliance. Luxury vehicles and SUVs continue to attract the highest slab.

3. GST on Three-Wheelers

 

 

  • Earlier Rate: 28%
  • New Rate: 18% GST
  • Impact: Brings relief to auto-rickshaw manufacturers and buyers, boosting the affordable public transport sector.

4. GST on Buses and Passenger Vehicles (10+ Seaters)

  • Earlier Rate: 28%
  • New Rate: 18% GST
  • Impact: Reduced costs for buses will benefit the public transport ecosystem and state transport corporations.

5. GST on Ambulances

  • Earlier Rate: 28%
  • New Rate: 18% GST
  • Impact: Lower taxation supports healthcare mobility and reduces costs for hospitals and ambulance providers.

6. GST on Goods Transport Vehicles (Lorries & Trucks)

 

 

  • Earlier Rate: 28%
  • New Rate: 18% GST
  • Impact: Brings down costs in the logistics and transport sector, which may indirectly benefit supply chains and reduce freight charges.

7. GST on Tractors and Semi-Trailers

  • Tractors: 5% GST (except large road tractors >1800 cc, taxed at 18%).
  • Impact: Relief for agriculture and transport operators, ensuring affordability for farmers and small transporters.

8. GST on Motorcycles

  • Motorcycles up to 350 cc (including 350cc): 18% GST
  • Motorcycles above 350 cc: 40% GST
  • Impact: Two-wheeler buyers in the commuter segment gain tax relief, while luxury and premium bikes remain highly taxed.

9. Simplification of Car Tax Structure

 

 

Previously, cars were taxed at 28% GST plus Compensation Cess (ranging 1–22%), making the total tax incidence vary between 29% and 50%. Now, the system is simplified to:

  • 18% for small cars
  • 40% for mid/large cars, SUVs, and luxury vehicles

This shift reduces confusion and removes the additional compliance burden of cess.

Conclusion

The 56th GST Council meeting has streamlined car taxation by introducing two clear slabs—18% and 40%. While small and affordable vehicles become cheaper, luxury and large vehicles continue to bear a higher tax burden. At the same time, tax rates on buses, ambulances, trucks, and three-wheelers have been lowered to 18%, ensuring support for public transport, healthcare, and logistics sectors.

This reform is expected to boost demand in the small car and commercial vehicle segments, while maintaining high taxation on luxury consumption, aligning with the principle of equity in taxation.

In-Depth Clarifications on the 56th GST Council Meeting FAQs

The 56th GST Council meeting, held in New Delhi on 3rd September 2025, introduced a landmark restructuring of GST rates across goods and services. To address common concerns, the government has released a set of Frequently Asked Questions (FAQs) that provide clarity on the applicability of new rates, input tax credit (ITC), transitional provisions, and sector-specific impacts.

Click here to download FAQ

Key Highlights from the FAQs

1. Effective Date of New GST Rates

The revised GST rates will apply from 22nd September 2025, except for sin goods like cigarettes, chewing tobacco, unmanufactured tobacco, and beedis. For these, current rates continue until outstanding compensation cess loans and interest are settled.

2. Registration Thresholds

There is no change in the registration threshold under the CGST Act for suppliers of goods.

3. Transitional Provisions – Supply, Advances, and ITC

  • Supplies made before the rate change but invoiced later will be taxed as per time of supply rules (Section 14, CGST Act).
  • Advances received before 22nd September 2025 will be taxed at old rates, while supplies made post-change will attract revised rates.
  • ITC already availed at higher rates can still be utilized, but where supplies turn exempt post-change, ITC reversal will be required.
  • Refunds of accumulated ITC are not admissible in cases where the rate change is due to rationalisation but inputs and outputs remain the same.

4. Imports and IGST

Imported goods will be subject to revised rates under the new GST notifications, unless specifically exempt.

5. Clarifications on Goods

  • Milk & Plant-based Milk: UHT milk is exempted; plant-based and soya milk drinks now taxed at 5%.
  • Agricultural Machinery: Rates reduced from 12% to 5%, balancing farmer relief with protection of domestic manufacturers.
  • Medicines & Medical Devices: Uniform concessional rate of 5% applies to medicines and most devices, aimed at reducing healthcare costs.
  • Automobiles:
    • Small cars – reduced to 18%.
    • Mid-size/large cars & SUVs – taxed at 40% (without cess).
    • Motorcycles up to 350cc – 18%; above 350cc – 40%.
    • Buses, ambulances, and goods vehicles – 18% (down from 28%).
  • Daily-use Goods: Toilet soap bars, shampoos, shaving creams, toothpaste, and toothbrushes are now taxed at 5% to ease burden on households.
  • Luxury & Sin Goods: Carbonated fruit beverages, online gaming, betting, casinos, and admission to IPL-like sporting events attract a special 40% rate.

6. Renewable Energy & Green Push

GST on renewable energy equipment has been cut from 12% to 5%, with refund mechanisms to neutralize inverted duty. This step is designed to boost clean energy adoption.

7. Services Sector

  • Passenger Transport: Road transport services remain at 5% without ITC (option to pay 18% with ITC).
  • Goods Transport Agency (GTA): Option to choose 5% (no ITC) or 18% (with ITC).
  • Job Work: For pharmaceuticals, hides, and leather (Chapter 41) reduced to 5% with ITC; residuary job work now 18%.
  • Beauty & Wellness: Salons, gyms, yoga centers, and spas now taxed at 5% (earlier 18%).
  • Insurance: All individual life and health insurance policies, including ULIPs and family floaters, are exempted from GST.

8. Sporting Events and Entertainment

  • IPL and similar events – 40% GST.
  • Recognized sporting events – exempt up to ₹500 ticket value, otherwise 18%.

Conclusion

The 56th GST Council meeting is one of the most significant reforms since GST’s introduction. By reducing rates on essential goods, healthcare, agriculture machinery, and transport while streamlining the taxation of luxury and sin goods, the Council has aimed to make GST more equitable and transparent. The FAQs further provide operational clarity to taxpayers on transitional provisions, ITC, exemptions, and new rate applicability.

With implementation from 22nd September 2025, businesses and consumers alike must adapt to these changes, which are expected to simplify compliance, reduce litigation, and align GST with broader socio-economic priorities.

At last, the wait ends: GST Appellate Tribunal (GSTAT) ready to begin accepting appeals

In a major development for the Goods and Services Tax (GST) framework, the Goods and Services Tax Appellate Tribunal (GSTAT) is set to become operational for accepting appeals before the end of September 2025 and will begin hearings before the end of December 2025.

This long-awaited step will establish a dedicated and structured mechanism for GST dispute resolution across India, addressing one of the most critical gaps in the tax system since GST’s rollout in 2017.

 

Check our course on How to handle GST Notice and Litigation – Reply and Drafting Skills

Key Highlights

  • Start of Operations: GSTAT will start accepting appeals before September-end and conduct its first hearings by December 2025.
  • Backlog Appeal Limitation: A special window until 30th June 2026 has been recommended for filing backlog appeals, ensuring that pending cases get a proper redressal mechanism.
  • Principal Bench as National Authority: The Principal Bench of the GSTAT will also serve as the National Appellate Authority for Advance Ruling (NAAAR), providing consistency in rulings across states.

Importance of GSTAT

  1. Robust Dispute Resolution
    • With lakhs of GST-related disputes pending across High Courts and lower authorities, GSTAT will function as the dedicated appellate forum for taxpayers.
  2. Consistency in Rulings
    • By doubling as the National Appellate Authority for Advance Ruling, it will bring uniformity and clarity in advance rulings, reducing state-wise interpretation conflicts.
  3. Ease of Doing Business
    • A transparent and speedy appellate framework will boost business confidence, reduce litigation costs, and enhance India’s ranking on global ease of doing business indices.
  4. Certainty for Taxpayers
    • Clear and time-bound resolution of appeals will help businesses plan their tax liabilities better and avoid prolonged uncertainty.

The operationalization of the Goods and Services Tax Appellate Tribunal (GSTAT) marks a significant institutional strengthening of India’s GST regime. By creating a specialized appellate body, ensuring uniformity in advance rulings, and setting a firm timeline for resolving disputes, the Council has addressed a long-standing demand of businesses and professionals.

 

This move is expected to enhance trust, transparency, and stability in GST administration, paving the way for a smoother tax environment and reduced litigation in the years ahead.

Festive Bonanza for the Nation: Fresh GST Rates Declared in 56th GST Council Meeting – What’s Costlier, What’s Cheaper

The Government of India has announced the Next-Gen GST Reform, positioned as a historic Diwali gift for the nation. With the vision of building an Aatmanirbhar Bharat and making life easier for citizens, the reform brings sweeping changes that reduce taxes on essential goods, agriculture, healthcare, education, and more. It also focuses on simplifying compliance processes for businesses.

1. Relief on Daily Essentials

Households will now save significantly on everyday items:

  • Hair Oil, Shampoo, Toothpaste, Toilet Soap, Toothbrushes, Shaving Cream: Reduced from 18% to 5%
  • Butter, Ghee, Cheese & Dairy Spreads: Reduced from 12% to 5%
  • Pre-packaged Namkeens, Bhujia & Mixtures: Reduced from 12% to 5%
  • Utensils: Reduced from 12% to 5%
  • Feeding Bottles, Napkins for Babies & Clinical Diapers: Reduced from 12% to 5%
  • Sewing Machines & Parts: Reduced from 12% to 5%

2. Support for Farmers & Agriculture

Agriculture has been given a major boost with lower GST on key inputs:

  • Tractor Tyres & Parts: Reduced from 18% to 5%
  • Tractors: Reduced from 12% to 5%
  • Bio-Pesticides, Micro-Nutrients: Reduced from 12% to 5%
  • Drip Irrigation System & Sprinklers: Reduced from 12% to 5%
  • Agricultural, Horticultural or Forestry Machines for Soil Preparation, Cultivation, Harvesting & Threshing: Reduced from 12% to 5%

 

3. Healthcare Sector Relief

Healthcare has been prioritized with several items either exempted or taxed lower:

  • Individual Health & Life Insurance: Reduced from 18% to Nil
  • Thermometers: Reduced from 12% to 5%
  • Medical Grade Oxygen: Reduced from 12% to 5%
  • All Diagnostic Kits & Reagents: Reduced from 12% to 5%
  • Glucometers & Test Strips: Reduced from 12% to 5%
  • Corrective Spectacles: Reduced from 12% to 5%

4. Affordable Education

To make education more affordable, key learning tools are exempted:

  • Maps, Charts & Globes: Reduced from 12% to Nil
  • Pencils, Sharpeners, Crayons & Pastels: Reduced from 12% to Nil
  • Exercise Books & Notebooks: Reduced from 12% to Nil
  • Erasers: Reduced from 5% to Nil

5. Automobiles Made Affordable

Vehicle costs are set to decline with lower GST rates:

  • Petrol & Petrol Hybrid, LPG, CNG Cars (up to 1200 cc & 4000 mm): Reduced from 28% to 18%
  • Diesel & Diesel Hybrid Cars (up to 1500 cc & 4000 mm): Reduced from 28% to 18%
  • 3-Wheeled Vehicles: Reduced from 28% to 18%
  • Motorcycles (350 cc & below): Reduced from 28% to 18%
  • Motor Vehicles for Transport of Goods: Reduced from 28% to 18%

6. Savings on Electronics & Appliances

Electronic goods for households will become cheaper:

  • Air Conditioners: Reduced from 28% to 18%
  • Televisions (above 32”, including LED & LCD TVs): Reduced from 28% to 18%
  • Monitors & Projectors: Reduced from 28% to 18%
  • Dishwashing Machines: Reduced from 28% to 18%

7. Process Reforms for Ease of Doing Business

The Next-Gen GST Reform not only reduces rates but also simplifies compliance for businesses:

  • Registration:
    • Automatic registration within 3 working days for applicants identified as non-risky.
    • System based on data analytics to determine eligibility.
    • Taxpayers exceeding ₹2.5 lakh per month ITC and opting for the scheme will be scrutinized.
  • Refunds:
    • Provisional refunds through a risk-based system.
    • Faster refund processing especially for exports, zero-rated supplies, and inverted duty structure cases.

8. Vision of the Reform

The government envisions this reform as a step toward making taxation better and simpler. It eases the cost of living for citizens, supports MSMEs and startups, and boosts overall consumption. As Prime Minister Narendra Modi highlighted, this initiative will not only provide relief to households but also give a new momentum to India’s economy.

✅ In summary: The Next-Gen GST Reform is a comprehensive package—reducing GST rates on essentials, agriculture, healthcare, education, electronics, and automobiles, while also simplifying compliance. It aims to make daily living more affordable and business operations more efficient, marking a new chapter in India’s tax landscape.

September 2025 Compliance Schedule (GST, Income Tax & MCA)

September is one of the most crucial months in the compliance cycle. This month brings together GST filings, Income Tax advance tax, audit reports, and MCA annual compliances. Missing a date can lead to penalties, interest, and loss of credibility with regulators.

Here is the detailed compliance calendar for September 2025.

📌 Important Due Dates

  • 7 Sept (Sunday)
    • Deposit of TDS/TCS for August 2025
    • Payment of Equalisation Levy for August 2025
  • 10 Sept (Wednesday)
    • GSTR-7 (TDS under GST) for August 2025
    • GSTR-8 (TCS by e-commerce operators) for August 2025
  • 11 Sept (Thursday)
    • GSTR-1 (Monthly) for August 2025
  • 13 Sept (Saturday)
    • Invoice Furnishing Facility (IFF) for August 2025 (QRMP taxpayers)
    • GSTR-6 (Input Service Distributor) for August 2025
    • GSTR-5 (Non-resident taxable persons) for August 2025
  • 15 Sept (Monday)
    • 2nd Instalment of Advance Tax for AY 2025-26 (45% cumulative)
    • Form 24G (by Govt deductors) for August 2025
    • Form 3BB (stock exchange transactions) for August 2025
    • ITR filing (Non-audit cases) for AY 2025-26 – Final extended deadline
  • 20 Sept (Saturday)
    • GSTR-3B (Monthly) for August 2025
    • GSTR-5A (OIDAR/non-resident online service providers) for August 2025
  • 25 Sept (Thursday)
    • GST PMT-06 payment for August 2025 (QRMP taxpayers)
  • 30 Sept (Tuesday)
    • Tax Audit Report (Form 3CA/3CB-3CD) for AY 2025-26
    • Audit Report of Trusts/Institutions (Form 10B/10BB) for AY 2025-26
    • Annual General Meeting (AGM) for FY 2024-25 under MCA
    • DIR-3 KYC (Director e-KYC) under MCA

🧾 Detailed Break-up

A. GST Compliances

  • 10 Sept – GSTR-7 & GSTR-8: For deductors of GST TDS and e-commerce operators collecting GST TCS.
  • 11 Sept – GSTR-1: Outward supplies for August (monthly filers).
  • 13 Sept – IFF (for QRMP taxpayers), GSTR-6 (ISD), GSTR-5 (NRTP).
  • 20 Sept – GSTR-3B (monthly) and GSTR-5A (OIDAR).
  • 25 Sept – PMT-06: Monthly tax deposit for QRMP scheme.

Checklist:
✔ Reconcile invoices with e-invoices and e-way bills.
✔ Ensure vendor compliance before ITC lock-in.
✔ Match GSTR-1 and GSTR-3B with books.

B. Income Tax Compliances

  • 7 Sept – Deposit TDS/TCS and Equalisation Levy for August.
  • 15 Sept – Advance Tax (45% cumulative), Form 24G, Form 3BB, and ITR for non-audit cases (final extended date).
  • 30 Sept – Tax Audit Reports (44AB) and Audit Reports for Charitable/Religious Trusts (Form 10B/10BB).

Checklist:
✔ Advance tax calculation should include capital gains, F&O, and interest income.
✔ Match TDS challans with Form 26AS and AIS.
✔ Ensure UDIN is generated for audit reports.

C. MCA Compliances

  • 30 Sept –
    • AGM for FY 2024-25 (as per Section 96 of the Companies Act).
    • Filing of DIR-3 KYC for directors.

Checklist:
✔ Finalise financial statements and Board’s Report in time.
✔ Ensure proper notice (21 clear days) before AGM.
✔ Directors to complete e-KYC with valid mobile and email OTPs.

September 2025 is a packed month for professionals, businesses, and corporates. From GST returns to advance tax and from tax audits to AGMs, almost every compliance stream has critical deadlines. Staying ahead with a checklist and calendar ensures smooth operations and avoids penalties.

10 Major Warning Signs Officers Track During a GST Audit | Documents & Records Verified by Authorities

Audit under GST is conducted to ensure that taxpayers have correctly paid taxes, claimed Input Tax Credit (ITC) in compliance with the law, and filed returns properly. Section 65 of the CGST Act, 2017 along with Rule 101 of the CGST Rules, 2017 provides the framework for departmental audits.

 

Audit in GST should verify the correctness of the facts and figures declared in the returns vis-a-vis books of accounts and returns filed by the taxpayers. Self- assessed declarations may contain hidden deviations. These deviations may be the result of omission, error, or deliberate action by a taxpayer.

Audit in GST should intend to evaluate the credibility of self-assessed tax liability of a taxpayer based on the twin test of accuracy of their declaration and the accounts maintained by the taxpayer

Legal Framework

Section 65 – Audit by Tax Authorities

  • Audit can be initiated by the Commissioner or an authorized officer.
  • It may be conducted at the taxpayer’s premises or at the department’s office.
  • At least 15 working days’ prior notice must be given (Form GST ADT-01).
  • Audit to be completed in 3 months (extendable by 6 months with written reasons).
  • Officer may demand records, explanations, and facilities to complete the audit.
  • Findings to be communicated in Form GST ADT-02 within 30 days of audit completion.
  • If discrepancies found → proceedings may be initiated under Section 73, 74, or 74A.

Rule 101 – Key Audit Aspects

  • Covers one financial year or part/multiples thereof.
  • Verification includes books of accounts, GST returns, ITC claims, tax rates, and refunds.
  • Discrepancies to be shared with the taxpayer for reply before finalization.

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Documents & Records Examined During GST Audit

During audit, officers typically examine the following categories of records:

Sale Invoice is in the top of the list to know the nature of business, GST Rates etc.

A. Invoices & Core Records

  • Sales invoices, purchase invoices, debit/credit notes.
  • Value of Supply, Time of Supply
  • Advance receipts and payments records.
  • Stock register – opening, inward, outward, and closing balances.
  • Delivery challans and job work challans.

B. GST-Specific Records

  • ITC register (eligible ITC claimed) and verification of ineligible/blocked ITC under Section 17(5).
  • GST rates applied – cross-check with HSN/SAC codes.
  • Liability on Reverse Charge Mechanism (RCM): expenses where RCM is applicable vs ITC claimed on RCM payments.
  • Post-sale discount adjustments (whether ITC reversed or credit notes issued properly).
  • E-way Bills – matching with outward/inward supply data.
  • Additional Place of Business records – movement of goods from/to additional premises and is this added on GST Portal or not
  • Export transactions – LUT/Bond, shipping bills, realization of foreign currency.
  • Purchases from “risky suppliers” (flagged for fake ITC or defaulting).

C. Financial Records

  • Books of account: ledgers, journals, cash book, bank book.
  • Balance sheet, profit & loss account, trial balance.
  • Fixed asset register and depreciation schedules (with ITC reversal where applicable).
  • Internal audit or statutory audit reports.
  • Miscellaneous income sources: scrap sales, insurance claims, forex gains, etc.

D. GST Returns & Reconciliations

  • GSTR-1, GSTR-3B, GSTR-2B, and annual returns GSTR-9/9C.
  • Reconciliation of Books of Accounts vs GST Returns.
  • Turnover reconciliation with Income Tax returns (Form 26AS, ITR, audited financials).
  • Check for sudden jump in turnover compared to previous periods.
  • Verification of refunds claimed and sanction orders.

Consolidated List

  • Annual report and Director‘s report (if any)
  • Profit & Loss A/C
  • Balance Sheet and Trial balance if maintained
  • Notes to accounts
  • Tax Audit Report
  • Statement of income tax TDS.
  •  List of HSN /SAC of the goods /or services in respect of the business.
  • Reconciliation statement in respect of Form GSTR 9, GSTR-1 AND GSTR 3B
  • Suppliers list with GSTIN (where applicable)
  • Ledger accounts of the suppliers
  • Statement of sales party wise and POS wise.
  • Supply for which tax paid in RCM.
  • Bank Statement for the period under audit
  • Stock register
  • Other documents and records as applicable as provided in section 35 of the Act

Key Points for Taxpayers to Remember

  • Maintain organized records for invoices, ledgers, and returns.
  • Regularly reconcile ITC with GSTR-2B and block ineligible ITC.
  • Check correct GST rates based on HSN/SAC classification.
  • Monitor expenses under RCM and claim ITC only if payment made.
  • Ensure e-way bill compliance and consistency with supply data.
  • Be cautious about dealing with “risky suppliers” flagged by the department, Check the status of GST registration and return filing on GST Portal before doing business with any new supplier
  • Regularly reconcile turnover between GST returns, books of account, and Income Tax filings.

Revised TDS Rates for FY 2025-26

Tax Deducted at Source (TDS) is one of the most important compliance requirements under the Income Tax Act, 1961. Every year, the government notifies updated rates and provisions that taxpayers, businesses, and professionals must follow while deducting and depositing TDS. For the financial year 2025-26 (AY 2026-27), the TDS rates cover payments such as salary, interest, rent, professional fees, contracts, and more. This updated TDS Rate Chart 2025-26 will help you understand at what rate tax needs to be deducted, thresholds, and key compliances to avoid penalties.

Under Income Tax Act 2025 TDS Rates are covered under Section 390 to 430 and Table chart are used

Rates for tax deduction at source*

[For Assessment year 2026-27]

Particulars TDS Rates (in %)
1. In the case of a person other than a company
1.1 where the person is resident in India-
Section 192: Payment of salary Normal Slab Rate
Section 192A: Payment of accumulated balance of provident fund which is taxable in the hands of an employee. 10
Section 193: Interest on securities
a) any debentures or securities for money issued by or on behalf of any local authority or a corporation established by a Central, State or Provincial Act; 10
b) any debentures issued by a company where such debentures are listed on a recognised stock exchange in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and any rules made thereunder; 10
c) any security of the Central or State Government;[i.e. 8% Savings (Taxable) Bonds, 2003 and 7.75% Saving (Taxable) Bonds, 2018, Floating Rate Savings Bonds, 2020 (Taxable) or any other notified security] 10
d) interest on any other security 10
Section 194: Income by way of dividend 10
Section 194A: Income by way of interest other than “Interest on securities” 10
Section 194B: Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort, or from gambling or betting of any form or nature whatsoever. 30
Section 194BA: Income by way of winnings from any online game 30
Section 194BB: Income by way of winnings from horse races 30
Section 194C: Payment to contractor/sub-contractor
a) HUF/Individuals 1
b) Others 2
Section 194D: Insurance commission 5
Section 194DA: Payment in respect of life insurance policy 2
Section 194EE: Payment in respect of deposit under National Savings scheme 10
Section 194F: Payment on account of repurchase of unit by Mutual Fund or Unit Trust of IndiaNote: The provisions of this section are not applicable with effect from 01-10-2024 20
Section 194G: Commission, etc., on sale of lottery tickets 2
Section 194H: Commission or brokerage 2
Section 194-I: Rent
a) Plant & Machinery 2
b) Land or building or furniture or fitting 10
Section 194-IA: Payment on transfer of certain immovable property other than agricultural land 1
Section 194-IB: Payment of rent by individual or HUF not liable to tax audit 2
Section 194-IC: Payment of monetary consideration under Joint Development Agreements 10
Section 194J:  Fees for professional or technical services:i)  sum paid or payable towards fees for technical servicesii)  sum paid or payable towards royalty in the nature of consideration for sale, distribution or exhibition of cinematographic films;iii)  Any other sumNote: With effect from June 1, 2017 the rate of TDS would be 2% in case of payee engaged in business of operation of call center. 2210
Section 194K: Income in respect of units payable to resident person 10
Section 194LA: Payment of compensation on acquisition of certain immovable property 10
Section 194LBA(1): Business trust shall deduct tax while distributing, any interest received or receivable by it from a SPV or any income received from renting or leasing or letting out any real estate asset owned directly by it, to its unit holders. 10
Section 194LBB: Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)] 10
Section 194LBC: Income in respect of investment made in a securitisation trust (specified in Explanation of section 115TCA) 10
Section 194M: Payment of commission (not being insurance commission), brokerage, contractual fee, professional fee to a resident person by an Individual or a HUF who are not liable to deduct TDS under section 194C, 194H, or 194J.Tax shall be deducted under Section 194M with effect from 1/09/2019 when aggregate of sum credited or paid during a financial year exceeds Rs. 50 lakh. 2
Section 194N: Cash withdrawal during the previous year from one or more account maintained by a person with a banking company, co-operative society engaged in business of banking or a post office:i) in excess of Rs. 1 crore#ii) in excess of Rs. 20 lakhs** for those persons who have not filed return of income (ITR) for three previous years immediately preceding the previous year in which cash is withdrawn, and the due date for filing ITR under section 139(1) has expired. The deduction of tax under this situation shall be at the rate of:a) 2% from the amount withdrawn in cash if the aggregate of the amount of withdrawal exceeds Rs. 20 lakhs during the previous year; orb) 5% from the amount withdrawn in cash if the aggregate of the amount of withdrawal exceeds Rs. 1 crore during the previous year.# The threshold limit of Rs. 1 crore is increased to Rs. 3 croresif the withdrawal of cash is made by co-operative society. 22/5
Section 194-O: Payment or credit of amount by the e-commerce operator to e-commerce participant 0.1
Section 194P: Deduction of tax by specified bank in case of senior citizen having age of 75 or more Tax on total income as per rate in force
Section 194Q: Payment for purchase of goods of the aggregate value exceeding Rs. 50 lakhsNote: TDS is deductible on sum exceeding Rs. 50 lakhs 0.1
Section 194R: Deduction of tax in case any benefit or perquisite is provided and aggregate value of such benefit/perquisite exceeds Rs. 20,000Note: Benefit or perquisite should be arising from business or the exercise of a profession by such resident. 10
Section 194S: Payment on transfer of Virtual Digital AssetNote: No tax shall be deducted under this provision in the following circumstance:• If the consideration is payable by any person (other than a specified person) and its aggregate value does not exceed Rs. 10,000 during the financial year.• if the consideration is payable by a specified person and its aggregate value does not exceed Rs. 50,000 during the financial year.Specified person means:(a) An individual or a HUF, whose total sales, gross receipts or turnover does not exceed Rs. 1 crore in case of business or Rs. 50 lakhs in case of a profession, during the financial year immediately preceding the financial year in which virtual digital asset is transferred;(b) An individual or a HUF who does not have any income under the head profits and gains of business or profession. 1
Section 194T: Payments of any sum in the nature of salary, remuneration, commission, bonus or interest to a partner of the firm.Note:(1) This provision is effective from 01-04-2025(2) No deduction if aggregate of such sum paid/payable does not exceed Rs. 20,000 during the financial year. 10
Any Other Income 10
1.2 where the person is not resident in India*-
Section 192: Payment of Salary Normal Slab Rate
Section 192A: Payment of accumulated balance of provident fund which is taxable in the hands of an employee. 10
Section 194B: Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort or from gambling or betting of any form or nature whatsoever. 30
Section 194BA: Income by way of winnings from any online game 30
Section 194BB: Income by way of winnings from horse races 30
Section 194E: Payment to non-resident sportsmen/sports association 20
Section 194EE: Payment in respect of deposits under National Savings Scheme 10
Section 194F: Payment on account of repurchase of unit by Mutual Fund or Unit Trust of IndiaNote: The provisions of this section are not applicable with effect from 01-10-2024 20
Section 194G: Commission, etc., on sale of lottery tickets 2
Section 194LB: Payment of interest on infrastructure debt fund 5
Sec. 194LBA(2): Payment of the nature referred to in  Section 10(23FC)(a) 5
Section 194LBA(2): Payment of the nature referred to in  Section 10(23FC)(b) 10
Section 194LBA(3): Payment of the nature referred to in section 10(23FCA) by business trust to unit holders 30
Section 194LBB: Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)]. 30
Section 194LBC: Income in respect of investment made in a securitisation trust (specified in Explanation of section115TCA) 30
Section 194LC: Payment of interest by an Indian Company or a business trust in respect of money borrowed in foreign currency under a loan agreement or by way of issue of long-term bonds (including long-term infrastructure bond) 5 or 4* or 9*** In case where interest is payable in respect of Long-term Bond or Rupee Denominated Bond listed on recognised stock exchange located in IFSC** Where money borrowed from a source outside India by issuing a long-term bond or rupee-denominated bond on or after 01-04-2023, which is listed only on a recognised stock exchange located in an IFSC
Section 194LD: Payment of interest on rupee denominated bond of an Indian Company or Government securities to a Foreign Institutional Investor or a Qualified Foreign Investor 5
Section 194N: Cash withdrawal during the previous year from one or more account maintained by a person with a banking company, co-operative society engaged in business of banking or a post office:i) in excess of Rs. 1 croreii) in excess of Rs. 20 lakhs** for those persons who have not filed return of income (ITR) for three previous years immediately preceding the previous year in which cash is withdrawn, and the due date for filing ITR under section 139(1) has expired. The deduction of tax under this situation shall be at the rate of:a) 2% from the amount withdrawn in cash if the aggregate of the amount of withdrawal exceeds Rs. 20 lakhs during the previous year; orb) 5% from the amount withdrawn in cash if the aggregate of the amount of withdrawal exceeds Rs. 1 crore during the previous year.   22/5
Section 194T: Payments of any sum in the nature of salary, remuneration, commission, bonus or interest to a partner of the firm.Note:(1) This provision is effective from 01-04-2025(2) No deduction if aggregate of such sum paid/payable does not exceed Rs. 20,000 during the financial year. 10
Section 195: Payment of any other sum to a Non-resident
a) Income in respect of investment made by a Non-resident Indian Citizen 20
b) Income by way of long-term capital gains referred to in Section 115E in case of a Non-resident Indian Citizen, 12.5
c) Income by way of long-term capital gains referred to in sub-clause (iii) of clause (c) of sub-Section (1) of Section 112 12.5
d) Income by way of long-term capital gains as referred to in Section 112A exceeding Rs. 1,25,000 12.5
e) Income by way of short-term capital gains referred to in Section 111A 20
f) Any other income by way of long-term capital gains [not being long-term capital gains referred to in sections 10(33), 10(36)]: 12.5
g) Income by way of dividend from a unit in International Financial Services Centre 10
h) Income by way of dividend [Other than (g)] 20
i) Income by way of interest payable by Government or an Indian concern on moneys borrowed or debt incurred by Government or the Indian concern in foreign currency (not being income by way of interest referred to in Section 194LB or Section 194LC) 20
j) Income by way of royalty payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern where such royalty is in consideration for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book on a subject referred to in the first proviso to sub-section (1A) of Section 115A of the Income-tax Act, to the Indian concern, or in respect of any computer software referred to in the second proviso to sub-section (1A) of Section 115A of the Income-tax Act, to a person resident in India 20
k) Income by way of royalty [not being royalty of the nature referred to point h) above] payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy 20
l) Income by way of fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy 20
m) Any other income 30
Section 196A: Income in respect of units of non-resident 20
Section 196B: Income from units referred to in section 115AB(1)(i) 10
Section 196B: Long-term capital gain on transfer of units referred to in section 115AB, 12.5
Section 196C: Income by way of interest or dividends in respect of bonds or GDR referred to in section 115AC 10
Section 196C: Long-term capital gain arising from transfer of bonds or GDR referred to in section 115AC 12.5
Section 196D: Income of foreign Institutional Investors from securities (not being dividend or capital gain arising from such securities)Note: Tax shall be deducted at the rate provided under DTAA if same is lower than the existing TDS rate of 20%. 20
Section 196D(1A): Income in respect of securities referred to in section 115AD(1)(a) payable to specified fund [referred to in clause (c) of Explanation to section 10(4D)]
Note: Since recipient of income is a specified fund, surcharge & health and education cess shall be nil.		 10
2. In the case of a company-
2.1 where the company is a domestic company-
Section 193: Interest on securities
a) any debentures or securities for money issued by or on behalf of any local authority or a corporation established by a Central, State or Provincial Act; 10
b) any debentures issued by a company where such debentures are listed on a recognised stock exchange in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and any rules made thereunder; 10
c) any security of the Central or State Government;[i.e. 8% Saving (Taxable) Bonds, 2003 and 7.75% Saving (Taxable) Bonds, 2018, Floating Rate Savings Bonds, 2020 (Taxable) or any other notified security] 10
d) interest on any other security 10
Section 194: Dividend 10
Section 194A: Income by way of interest other than “Interest on securities” 10
Section 194B: Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort or from gambling or betting of any form or nature whatsoever. 30
Section 194BA: Income by way of winnings from any online game 30
Section 194BB: Income by way of winnings from horse races 30
Section 194C: Payment to contractor/sub-contractor
a) HUF/Individuals 1
b) Others 2
Section 194D: Insurance commission 10
Section 194DA: Payment in respect of life insurance policyw.e.f. 1/9/2019, the tax shall be deducted on the amount of income comprised in insurance pay-out 2
Section 194EE: Payment in respect of deposit under National Savings scheme 10
Section 194F: Payment on account of repurchase of unit by Mutual Fund or Unit Trust of IndiaNote: The provisions of this section are not applicable with effect from 01-10-2024 20
Section 194G: Commission, etc., on sale of lottery tickets 2
Section 194H: Commission or brokerage 2
Section 194-I: Rent
a) Plant & Machinery 2
b) Land or building or furniture or fitting 10
Section 194-IA:Payment on transfer of certain immovable property other than agricultural land 1
Section 194-IC:Payment of monetary consideration under Joint Development Agreements 10
Section 194J:  Fees for professional or technical services:iv)   sum paid or payable towards fees for technical servicesv)   sum paid or payable towards royalty in the nature of consideration for sale, distribution or exhibition of cinematographic films;vi)   Any other sumNote: With effect from June 1, 2017 the rate of TDS would be 2% in case of payee engaged in business of operation of call center. 2210
Section 194K : Income in respect of units payable to resident person 10
Section 194LA: Payment of compensation on acquisition of certain immovable property 10
Section 194LBA(1): Business trust shall deduct tax while distributing, any interest received or receivable by it from a SPV or any income received from renting or leasing or letting out any real estate asset owned directly by it, to its unit holders. 10
Section 194LBB: Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)] . 10
Section 194LBC: Income in respect of investment made in a securitisation trust (specified in Explanation of section115TCA) 10
Section 194M: Payment of commission (not being insurance commission), brokerage, contractual fee, professional fee to a resident person by an Individual or a HUF who are not liable to deduct TDS under section 194C, 194H, or 194J.Tax shall be deducted under Section 194M with effect from 1/09/2019 when aggregate of sum credited or paid during a financial year exceeds Rs. 50 lakh. 2
Section 194N: Cash withdrawal during the previous year from one or more account maintained by a person with a banking company, co-operative society engaged in business of banking or a post office:iii)   in excess of Rs. 1 croreiv)   in excess of Rs. 20 lakhs** for those persons who have not filed return of income (ITR) for three previous years immediately preceding the previous year in which cash is withdrawn, and the due date for filing ITR under section 139(1) has expired. The deduction of tax under this situation shall be at the rate of:a)   2% from the amount withdrawn in cash if the aggregate of the amount of withdrawal exceeds Rs. 20 lakhs but not exceeding Rs. 1 crore during the previous year; orb)   5% from the amount withdrawn in cash if the aggregate of the amount of withdrawal exceeds Rs. 1 crore during the previous year. 22/5
Section 194-O: Payment or credit of amount by the e-commerce operator to e-commerce participant 0.1
Section 194P: Deduction of tax by specified bank in case of senior citizen having age of 75 or more Tax on total income as per rate in force
Section 194Q: Payment to resident for purchase of goods of the aggregate value exceeding Rs. 50 lakhsNote: TDS is deductible on sum exceeding Rs. 50 lakhs 0.1
Section 194R: Deduction of tax in case any benefit or perquisite is provided and aggregate value of such benefit/perquisite exceeds Rs. 20,000Note: Benefit or perquisite should be arising from business or the exercise of a profession by such resident. 10
Section 194S: Payment on transfer of Virtual Digital AssetNote: No tax shall be deducted under this provision in the following circumstance:• If the consideration is payable by any person (other than a specified person) and its aggregate value does not exceed Rs. 10,000 during the financial year.• if the consideration is payable by a specified person and its aggregate value does not exceed Rs. 50,000 during the financial year.Specified person means:(a) An individual or a HUF, whose total sales, gross receipts or turnover does not exceed Rs. 1 crore in case of business or Rs. 50 lakhs in case of a profession, during the financial year immediately preceding the financial year in which virtual digital asset is transferred;(b) An individual or a HUF who does not have any income under the head profits and gains of business or profession. 1
Any Other Income 10
2.2 where the company is not a domestic company*-
Section 194B: Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort or from gambling or betting of any form or nature whatsoever. 30
Section 194BA: Income by way of winnings from any online game 30
Section 194BB: Income by way of winnings from horse races 30
Section 194E: Payment to non-resident sports association 20
Section 194G: Commission, etc., on sale of lottery tickets 2
Section 194LB: Payment of interest on infrastructure debt fund 5
Section 194LBA(2): – Payment of the nature referred to in  Section 10(23FC)(a) 5
Section 194LBA(2): Payment of the nature referred to in  Section 10(23FC)(b) 10
Section 194LBA(3): Business trust shall deduct tax while distributing any income received from renting or leasing or letting out any real estate asset owned directly by it to its unit holders. 35
Section 194LBB: Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)]. 35
Section 194LBC: Income in respect of investment made in a securitisation trust (specified in Explanation of section115TCA) 35
Section 194LC: Payment of interest by an Indian Company or a business trust in respect of money borrowed in foreign currency under a loan agreement or by way of issue of long-term bonds (including long-term infrastructure bond) 5 or 4* or 9*** In case where interest is payable in respect of Long-term Bond or Rupee Denominated Bond listed on recognised stock exchange located in IFSC ** Where money borrowed from a source outside India by issuing a long-term bond or rupee-denominated bond on or after 01-04-2023, which is listed only on a recognised stock exchange located in an IFSC;
Section 194LD:Payment of interest on rupee denominated bond of an Indian Company or Government securities to a Foreign Institutional Investor or a Qualified Foreign Investor 5
Section 195: Payment of any other sum
a) Income by way of long-term capital gains referred to in sub-clause (iii) of clause (c) of sub-Section (1) of Section 112 12.5
b) Income by way of long-term capital gains as referred to in Section 112A exceeding Rs. 1,25,000 12.5
c) Income by way of short-term capital gains referred to in Section 111A 20
f) Any other income by way of long-term capital gains [not being long-term capital gains referred to in sections 10(33), 10(36) and 112A] 12.5
d) Income by way of dividend from a unit in International Financial Services Centre 10
e) Income by way of dividend [Other than (d)] 20
f) Income by way of interest payable by Government or an Indian concern on moneys borrowed or debt incurred by Government or the Indian concern in foreign currency (not being income by way of interest referred to in Section 194LB or Section 194LC) 20
g) Income by way of royalty payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March, 1976 where such royalty is in consideration for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book on a subject referred to in the first proviso to sub-section (1A) of Section 115A of the Income-tax Act, to the Indian concern, or in respect of any computer software referred to in the second proviso to sub-section (1A) of Section 115A of the Income-tax Act, to a person resident in India 20
h) Income by way of royalty [not being royalty of the nature referred to in point f) above] payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy—
A. where the agreement is made after the 31st day of March, 1961 but before the 1st day of April, 1976 50
B. where the agreement is made after the 31st day of March, 1976 20
i) Income by way of fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy—
A. where the agreement is made after the 29th day of February, 1964 but before the 1st day of April, 1976 50
B. where the agreement is made after the 31st day of March, 1976 20
j) Any other income 35
Section 196A: Income in respect of units of non-resident 20
Section 196B: Income from units referred to in section 115AB(1)(i) 10
Section 196B: Long-term capital gain on transfer of units referred to in section 115AB 12.5
Section 196C: Income by way of interest or dividends in respect of bonds or GDR referred to in section 115AC 10
Section 196C: Long-term capital gain arising from transfer of bonds or GDR referred to in section 115AC 12.5
Section 196D(1): Income of foreign Institutional Investors from securities (not being dividend or capital gain arising from such securities)Note: Tax shall be deducted at the rate provided under DTAA if same is lower than the existing TDS rate of 20%. 20
Section 196D(1A): Income in respect of securities referred to in section 115AD(1)(a) payable to specified fund [referred to in clause (c) of Explanation to section 10(4D)]Note: Since recipient of income is a specified fund, surcharge & health and education cess shall be nil. 10

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