Finance Minister Nirmala Sitharaman has announced a slew of direct tax measures as part of the Covid-19 relief package. Prime Minister Narendra Modi had earlier promised an economic package that was centered around land, labour, law and liquidity to boost the country’s economy.
The measures announced today will give a huge relief to businesses and would play a pivotal role in increasing cash flows as the beneficial rates would be available till the end of the current financial year, Rakesh Nangia, chairman at Nangia Andersen Consulting, said. “This, coupled with release of pending refunds to all non-corporate taxpayers, would fast-track the revival of business and enterp
Here are the key measures announced by the finance minister:
TDS/TCS Rate Reduction A 25 percent reduction in existing rates for tax deducted at source for specified non-salary payments which are made to residents.
Rate for tax collection at source for specified receipts has also been reduced by 25 percent.
Payment for transactions like contract, professional fees, interest, rent, dividend, commi The tax department would’ve anyway received a lot of applications under Section 197 of the income tax law to permit lower withholding, Deloitte India’s Rohinton Sidhwa said. If profitability of a company is expected to remain low, the overall amount that is payable in form of tax will also be low, and so assessees would’ve requested the revenue department for a lower withholding rate, he explained
“This is a welcome relief and will also reduce the administrative burden,” Sidhwa said.
The government has notified certain revisions in TDS rates for the period between May 15, 2020 and March 31, 2021:
TDS on payment of dividends by mutual funds, interest on securities, dividend, interest under Section 194A, commission, brokerage as well as rent on immovable property has been reduced to 7.5 percent instead of existing 10 percent.
TDS on e-commerce participants, payments for acquisi
Due Dates Extended
Due date for all income tax returns for FY2019-20 has been extended from July 31 and Oct.
31 to Nov. 30. Tax audit due date has been extended from Sept. 30 to Oct. 31. Date of assessments getting barred on Sept.30 has been extended to Dec. 31.
Similarly, assessments getting barred on March 31, 2021 are extended till the end of September 2021.