TDS / TCS Rates for non-salaried payments reduced by 25% till March 31, 2021

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The reduced TDS and TCS rate will be for specific payments such as payment for a contract, professional fees, interest, rent etc.

In order to provide more funds at the disposal of the taxpayers, 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 has been be reduced by 25% of the existing rates.

The Finance Minister Nirmala Sitharaman said that, Payment for the contract, professional fees, interest, rent, dividend, commission, brokerage, etc. shall be eligible for this reduced rate of Tax Deduction at Source.

This reduction shall be applicable for the remaining part of the FY 2020-21 i.e. from tomorrow 14th May 2020 to 31st March, 2021.

The Finance Minister also said that, It will help to Rs 50,000 crores liquidity through TDS/TCS rate reduction.

She also said that the income tax department has already cleared Rs 18,000 crore worth of refunds where the quantum due was up to Rs 5 lakh and instructed that all pending refunds to charitable trusts and non-corporate business and professions will be issued immediately.

TDS rate was not deducted on salaries, after considering various eligible deductions such as 80C of the salaried person. This had been done to ensure that the salaried individual did not bear the burden of paying higher taxes at the year end.