The economy that we are in today is quite a bit different from what it was just a few months back. The global pandemic that has wreaked havoc to our society sees no end in the foreseeable future. To face this issue and to bring back the economy on track various measures were under the Atma Nirbhar Bharat economic stimulus package was announced. Measures like reduction in TDS and TCS rates, extension of the compliance dates for income tax returns, and timely tax refunds have been announced by the Government. PM Narendra Modi emphasised on this while announcing the Rs 20 lakh crore economic stimulus. He ensured that everyone will gain some kind of benefit so as to make a self-reliant India.
TDS, TCS rate reductions
Tax Deducted at Source (TDS) for certain specified non-salaried payments along with Tax Collection at Source (TCS) for specified receipts will have a reduction of 25 per cent of existing rates. Declaring some of the first set of measures under Atma Nirbhar Bharat stimulus package, Finance Minister Nirmala Sitharaman announced that this rate reduction will remain for the rest of financial year 2020-21, i.e. till March 31st, 2021
Various other payments like professional fees, interest, dividend, rent, brokerage, commission, etc shall also be eligible for the reduced rate of TDS. This reduction in TDS and TCS rates could help put Rs 50,000 crore in the hands of the people, which would have been paid as tax. This helps create more liquidity.
FM Sitharaman also announced that the due date for filing income tax returns for the Financial Year 2019-20 will be extended to November 30th, 2020. Tax audits for the same will happen between the period September 30th, 2020 and October 31st, 2020. The Period of Vivad se Vishwas Scheme for settling any direct tax disputes without any additional payments has been extended to December 31st, 2020. Date of assessments that could get barred on September 30th, 2020 will be extended to December 31st, 2020, and those that will get barred on March 31st, 2021 has been extended to September 30th, 2021.
Any pending refunds to non-corporate businesses and charitable trusts, professions, which includes partnership, proprietorship, LLP and Co-operatives, will be issued as soon as possible.