TDS, TCS rates to be reduced by 25% till 31st March 2021: FM Sitharaman
In order to provide more funds at the disposal of the taxpayers, the rates of TDS for non-salaried specified payments made to residents and rates of TCS for specified receipts shall be reduced by 25%.
NEW DELHI: Finance Minister Nirmala Sitharaman in her address on Wednesday announced several direct tax measures taken by the government. The FM announced that tax deducted at source (TDS) for non-salaried income will be reduced by 25 per cent of the existing rates. Sitharaman said this would place more funds at the disposal of the taxpayers.
“We think this measure will release liquidity of Rs 50,000 crore who otherwise would have paid the tax,” Sitharaman said. As per the government document, this reduced rate of TDS will be available for payment for contract, professional fees, interest, rent, dividend, commission and brokerage income.
Note that this reduction shall be applicable for the remaining part of the financial year 2020-21. It will come into force from Thursday (May 14). “Reduction in TDS and TCS rates for non-salaried payments and reduction in EPF contribution rates will further increase cash in hand for taxpayers, leading to a consequent boost in demand, setting the economy rolling,” said Clear Tax Founder and CEO Archit Gupta.
Rs 50,000 crores liquidity through TDS/TCS rate reduction:
• In order to provide more funds at the disposal of the taxpayers, the rates of Tax Deduction at Source (TDS) for non-salaried specified payments made to residents and rates of Tax Collection at Source (TCS) for the specified receipts shall be reduced by 25% of the existing rates.
• Payment for contract, professional fees, interest, rent, dividend, commission, brokerage, etc. shall be eligible for this reduced rate of TDS.
• This reduction shall be applicable for the remaining part of the FY 2020-21 i.e. from May 14, 2020, to 31st March 2021.
• This measure will release Liquidity of Rs. 50,000 crore.
“Reduction in TDS and TCS rates for non-salaried payments is an innovative and welcome step to put money in the hands of service industry bridging some of the gap in working capital created due to Coronavirus induced lockdown. Further, the augmentation of the MSME criteria should also help more service providers take the benefit of PSL (priority sector lending) from their bankers,” said CA Sumit Chhabra, Tax Consultant.
Other Direct Tax Measures:
• All pending refunds to charitable trusts and noncorporate businesses & professions including proprietorship, partnership, LLP and Co-operatives shall be issued immediately.
• The due date of all income-tax return for FY 2019-20 will be extended from 31st July 2020 & 31st October 2020 to 30th November 2020 and Tax audit from 30th September 2020 to 31st October 2020.
• Date of assessments getting barred on 30th September 2020 extended to 31st December 2020 and those getting barred on 31st March 2021 will be extended to 30th September 2021.
• Period of Vivad Se Vishwas Scheme for making payment without additional amount will be extended to 31st December 2020.
Source- Times Now.
The post TDS, TCS rates to be reduced by 25% till 31st March 2021: FM Sitharaman appeared first on GST Station.
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