Today, the Finance Minister presented the first part of Rs. 20 lakhs crore stimulus package announced by Prime Minister Modi. Part I inter alia comprised of measures to support businesses including MSMEs, NBFCs, DISCOMs and Real Estate.
The First part also included two Income tax related measures which according to the Government would provide the required liquidity to the taxpayers. These measures are as under:
- 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 is reduced by 25% of the existing rates.
- Accordingly, this relief with applicable to payment for contract, professional fees, interest, rent, dividend, commission, brokerage, etc. which attract TDS provisions.
- For example, where the existing rate of TDS for payment of professional fees was 10%, the same has been reduced to 7.5%.
- These reduced rates will applicable for the period 14th May, 2020 to 31st March, 2021.
2. All pending income tax refunds receivable by charitable trusts and non-corporate businesses and professions including proprietorship, partnership, LLP and Co-operatives will be issued immediately.
The Finance Minister also announced the deferment of some important due dates for income-tax related compliances:
- Due date of all income tax return for FY 2019-20 will be extended from 31st July, 2020 31st October, 2020 to 30th November, 2020 and Tax audit from 30th September, 2020 to 31st October, 2020
- Date of assessments getting barred on 30th September, 2020 extended to 31st December, 2020 and those getting barred on 31st March, 2021 will be extended to 30th September, 2021
- Period of Vivad se Vishwas Scheme for making payment without additional amount will be extended to 31st December, 2020
