Government gives big relief
A drastic 25% reduction in TDS rate
Finance Minister Nirmala Sitharaman made a big announcement on TDS and TCS Today. She said that it has been decided to cut all the TDS / TCS rates of non-salaried by 25 percent till 31 March 2021. The Finance Minister said that the rate of TDS, TCS on other types of payments excluding salary will be reduced by 25 percent till 31 March 2021. This will be enforced from 14-05-2020.
For Example: If Mr. A charge Rs.50,000/- as audit fee then the recipient was required to deduct the TDS @10% i.e Rs.5000/- and pay the balance of Rs.45,000/- to Mr. A and Rs.5000 to the government. But now recipient is required to deducted TDS @7.5% only i.e Rs.3,750/- and pay the balance of Rs.46,250/- to Mr. A, Now it will generate Rs.1,250/- extra in the hand of Mr. A.
Explain that the government collects tax through TDS. TDS is deducted at various sources of income. This includes salary, interest, brokerage or commission received on any investment, etc. This move of the government will save more money to spend in the hands of the people. With this, the liquidity of 50000 crore rupees will remain in the hands of the people.
Below Table shows the Old and New TDS rate applicable from 14-05-2020| Section and Detail | Old Rate | New Rate |
|---|---|---|
Section 193: Interest on securities. | 10% | 7.5% |
Section 194A: Income by way of interest other than “Interest on securities” | 10% | 7.5% |
Section 194C: Payment to contractor/sub-contractors. | 1% for HUF / Individual, 2% for Others | 0.75% for HUF / Individual, 1.50% for Others |
Section 194I: Rent on Land or building or furniture or fitting | 10% | 7.5% |
Section 194J: Any sum paid by way of Fee for professional services | 10% | 7.5% |
Section 194J: Any sum paid by way of Fee for technical services | 2% | 1.5% |
Income Tax Date Extension
The Finance Minister also announced to extend the deadline for filing income tax returns with it. Deadline for income tax return filing has been extended from 31st July 2020 and 31st October.
The date for submission of all income tax returns for the financial year 2019-20 has been extended from 31st July 2020 & 31st October 2020 to 30th November 2020 and for the tax audit report has been extended from 30th September 2020 to 31st October 2020.
Similarly, the deadline of the Vivad se Vishwaas Scheme has been extended till 31st December 2020. Previously it was till 30th June 2020
| Category of Taxpayer | Old Due Date | New Due Date |
|---|---|---|
Individual | 31st July 2020 | 30th November 2020 |
Body of Individuals (BOI)/ Association of Person (AOA) | 31st July 2020 | 30th November 2020 |
Hindu Undivided Family (HUF) | 31st July 2020 | 30th November 2020 |
Businesses (Requiring Audit) and Partner of the firm which is covered under audit | 31st October 2020 | 30th November 2020 |
Businesses (Requiring TP Report) | 30th November 2020 | 30th November 2020 |
Due Date of Furnishing Tax Audit Report | 30th September 2020 | 31st October 2020 |
Tax Audit Report Date Extension
The due date of the tax audit report has been extended from 30th September 2020 to 31 October 2020. One thing is to be noted here is the date of filing of TAX AUDIT REPORT is one month before the due date of filing of Income Tax Return in case of TAX AUDIT. That is extended due date of filing of the Tax Audit Report is 31st October 2020 and Income Tax Return is 30th November 2020.
Assessment Due Date Extension
The assessment date, which ends on 30th September 2020, has been extended to 31st December 2020. The assessment date ending on 31st March 2021 is being extended to 30th September 2021.
