Five income tax relaxations that you need to know
In order to enhance liquidity in the hands of taxpayers, FM announced a reduction in the rate of tax deducted at source (TDS) for non-salaried specified payments made to residents by 25%.
The coronavirus crisis has impacted lives severely. Several employees have been fired and many have witnessed salary reduction. In order to offer some relief to taxpayers amid such situation, Finance Minister Nirmala Sitharaman recently announced a slew of direct tax measures. FM said in her press conference, “We think this measure will release liquidity of Rs 50,000 crore who otherwise would have paid the tax.”
5 Income Tax relaxations that you need to know:
1. TDS rate cut: In order to enhance liquidity in the hands of taxpayers, FM announced a reduction in the rate of tax deducted at source (TDS) for non-salaried specified payments made to residents by 25%.
2. TCS rate cut: In order to provide more funds at the disposal of the taxpayers, the rates of Tax Collection at Source (TCS) for the specified receipts are reduced by 25% of the existing rates.
3. ITR filing deadline extension: The due date of all income-tax return for FY 2019-20 will be extended from 31st July 2020 and 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.
4. Pending tax refunds: All pending refunds to charitable trusts and noncorporate businesses & professions including proprietorship, partnership, LLP and Co-operatives shall be issued immediately.
5. Vivad Se Vishwas extension: Period of Vivad Se Vishwas Scheme for making payment without additional amount will be extended to 31st December 2020. The scheme was introduced to reduce income tax pending litigation and generate timely revenues for the government. It aims to help taxpayers end their tax disputes with the department by paying disputed tax and get a waiver from payment of interest and penalty.
It is worth mentioning that cash withdrawals over Rs 1 crore and foreign remittances have been kept out of the purview of the TDS cut. Finance Secretary Ajay Bhushan Pandey recently clarified that cash withdrawals and foreign remittances have also been kept out of the rate reduction ambit to promote digital transactions and restrict larger outflow of money.
Pandey also clarified that the TDS on salary has not been reduced in order to prevent the salaried people from facing heavy tax burden at the time of filing returns and paying the full quota of taxes for the year.