Finance minister Smt. Nirmala sitaraman held a press conference on 13th May 2020 to provide details of Rs.20 Lakh Crore special economic package announced by the Prime Minister on the day before 12.05.2020 to spur growth and revive the Indian economy amid COVID-19 pandemic.
The finance minister said the rates of TDS for non-salaried specified payments made to residents and rates of TCS for the specified receipts will be reduced by 25 per cent of existing rates.
The reduction shall be applicable for the remaining part of the financial year 2020-21 starting May 14, 2020 to till March 31, 2021.
The reduction of TDS and TCS rates on non-salaried payments by 25 per cent will set free additional cash in the hands of vendors, overall increasing liquidity in the economy.
The government also announced that it will issue all refunds to charitable organisations and other non-corporate tax payers. Till now over Rs 18,000 crore has been issued as refunds to small taxpayers.
Income Tax under the Direct Taxes which are outlined below:
The pending income tax refunds to charitable trusts and non-corporate businesses and professions including proprietorship, partnership and LLPs and cooperatives shall be issued immediately.
In order to provide more funds at the disposal of taxpayers for dealing with the economic situation arising out of COVID-19 pandemic, rates of TDS have been reduced by 25% for specified payments to resident non-salaried assesses.
The due date of all Income Tax Returns for Assessment Year 2020-21 (FY 2019-20) will be extended from 31st July, 2020 and 31st October, 2020 to 30 November, 2020. Similarly, the tax audit due date will be extended from 30th September to 31st October 2020.
The date of assessments getting barred on 30th September, 2020 will be extended to 31st December, 2020 and those getting time barred on 31st March 2021 will be extended to 30th September, 2021.
CBDT has issued a press note on 13.05.2020 specifying the new reduced rates of TDS and TCS effective from 14.05.2020 to 31.03.2021. From April 1, 2021, the prescribed rates of TDS shall apply. In the notification, the CBDT said while TCS on sale of the motor vehicle above ₹10 lakh has been cut to 0.75 per cent from 1 per cent earlier, TDS on 23 items has been reduced.
