New Delhi: Finance Minister Nirmala Sitharaman has reduced the TDS by 25% on non-salaried payment. Furthermore, the due of filing tax returns has been extended until November. On Wednesday, the Finance Minister made this announcement while giving information about some portion of the total package worth 20 lakh crores. This decision regarding TDS and TCS will increase financial liquidity by ₹50,000 crores.
The rate of TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) have been reduced by 25% until 31 March 2021. However, this reduction will not apply to everyone. The TDS is valid only for non-salaried payment and TCS on select few receipts.
If a person is to pay TDS and TCS worth ₹100, then they will only have to pay ₹75, said State Finance Minister, Anurag Thakur, while delivering information about the package. The TDS reduction would be valid only while paying contract, professional fees, interest, rent, dividend, commission and brokerage income. Even though this tax applies to non-salaried payments, the tax-payers will anyway end up saving about ₹50,000 crores. This will help increase financial liquidity. Moreover, Finance Minister Nirmala Sitharaman has informed of extension in the period of return file until 30 November.