In order to provide more funds at the disposal of the taxpayers, Finance Minister Nirmala Sitharaman on Wednesday announced that 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.
The Finance Minister 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.
The Finance Minister also said that, It will help to Rs 50,000 crores liquidity through TDS/TCS rate reduction.
Nirmala Sitharaman's press conference comes a day after Prime Minister Narendra Modi announced USD 265 billion fiscal stimulus to deal with COVID-19 situation in the country. The package is the second largest in Asia after Japan.
Meanwhile, due date for filing income tax returns (ITR) was extended from July 31 to November 30. Also, Tax audit deadline has been extended from 30th September, 2020 to 31st October.