Government Rolls Out Tax Benefits: Extends Return Deadline, Reduces TDS By 25%
The government on Wednesday announced tax-related measures like postponing the deadline for filing income tax (I-T) returns and reducing the tax deducted at source (TDS), in order to ease pressure on the taxpayers amid the coronavirus pandemic. The measures were detailed upon by Finance Minister Nirmala Sitharaman at a press conference, a day after Prime Minister Narendra Modi announced Rs 20 lakh crore economic relief package under the Atma Nirbhar Bharat Abhiyan. Ms Sitharaman said that the due date for filing all I-T returns for the financial year 2019-20 have been extended till 30 November, 2020.
Under normal circumstances, the last date for filing returns for a financial year is July 31 and that with late fee is October 31.
The government also said it will reduce the amount of tax to be deducted (TDS) or collected at source (TCS) by individuals and businesses at the time of transactions to put more money in their hands.
In this regard, the TDS and TCS will be reduced by 25 per cent of the existing rates for payment for contract, professional fees, interest, rent, dividend, commission and brokerage income. However, this reduction will not be applicable for salaries.
This reduction will come into force from tomorrow and shall be applicable for the remaining part of the financial year 2020-21, i.e. March 31, 2020.
The date for the tax audit was also pushed back by a month -- from September 30, 2020 to October 31, 2020, the finance minister said. Moreover, the period of "Vivad se Vishwas" Scheme for making payment without additional amount will be extended to December 31, 2020.
Ms Sitharaman was addressing the media to announce the first tranche of schemes under the Rs 20 lakh crore package. She is expected to hold more such press conferences in the coming days to address other sectors.