The government has extended the due date of filing all income tax returns for FY 2019-20 from 31 July 2020 and 31 October 2020 to 30 November 2020
The government will reduce the amount of tax to be deducted or collected at source by individuals and businesses at the time of transactions to put more money in their hands, finance minister Nirmala Sitharaman announced on Wednesday.
“The rates of tax deduction at source for non-salaries specified payments made and rates of tax collection at source for the specified receipts shall be reduced by 25 percent of the existing rates, Sitharaman said
“We think this measure will release liquidity of Rs 50,000 crore who otherwise would have paid the tax,” Sitharaman said.
This reduced rate of TDS (Tax deducted at source) and TCS (Tax collected at source) will be available for payment for contract, professional fees, interest, rent, dividend, commission and brokerage income.
This reduction will come into force from tomorrow and shall be applicable for the remaining part of the financial year 2020-21.
Sitharaman, who was unveiling the first tranche of the Rs 20 trillion financial package promised by Prime Minister Narendra Modi in his address to the nation, had also announced that the government had reduced the mandatory provident fund deductions of employees from 12 percent to 10 percent to put money in the hands of employees and companies.
The provident fund deduction for government and public sector employees will continue at 12 percent.
The government also extended the due date of all income tax returns for FY 2019-20 from 31 July 2020 and 31 October 2020 to 30 November 2020. The due date of tax audits from 30 September 2020 has been pushed to 31 October 2020.
Sitharaman also announced that the tax department was being told to immediately issue all pending refunds to charitable trusts and non-corporate businesses professions including proprietorship, partnership, LLP and cooperatives.
Similarly, the date of assessments getting barred on 30 September 2020 has been extended to 31 December 2020 and those getting barred on 31 March 2021 will be extended to 30 September 2021.
The finance minister said the idea was that people should not have to worry much about tax compliance.
People who have availed the Vivad se Vishwas Scheme have also been given time till 31 December to make their payments without any additional amount or penalty.