In today’s press conference, FM Nirmala Sitharaman has announced some reliefs to boost economy. In same conference they have also postponed the due date for filing of tax returns from July 31,2020 to November 30,2020.
They have also reduced the TDS and TCS rates other than on salary, so that taxpayers can have more funds available to them. Reduced tax rate now is as follows
|Particulars||Section||Old TDS Rate||New TDS Rate|
|TDS on Contractor (Ind or HUF)||194C||1.00%||0.75%|
|TDS on Contractor (Others)||194C||2.00%||1.50%|
|TDS on Rent||194I||5.00%||3.75%|
|TDS on Brokerage||194H||5.00%||3.75%|
|TDS on Interest||194A||10.00%||7.50%|
|TDS on Dividend||194||10.00%||7.50%|
|TDS on Premature PF withdrawal||192A||10.00%||7.50%|
|TDS on Professional||194J||10.00%||7.50%|
|TDS on Lottery||194BB||30.00%||22.50%|
Government has said that this will provide an overall relief of Rs. 50,000 Cr through liquidity in hands of taxpayer through this TDS/TCS rate cut.
However, this is not an actual relief but is only an deferment of tax liability, as taxpayer have to pay tax at the end of financial year and tax rates are same, there is no change in it. So, remember that a lower TDS rate would be collected while making payments to you, but the tax would have to be borne while filing returns
So, this is not an actual relief but has only provided liquidity for a specific period.