The government has also reduced the tax deduction at source (TDS) and tax collection at source (TCS) rates, so that taxpayers have more funds at their disposal. (TDS) for the following non-salaried specified payments made to residents has been reduced by 25% for the period stfrom 14 th May, 2020 to 31 March, 2021:- S. Due to the nationwide lockdown for Covid-19 pandemic, liquidity flow and the business activities were jeopardized. 1. Latest TDS Rates FY 2020-21 (Assessment Year 2021-22). It will be beneficial for both the deductor and the deductee in order to restore the cash flow and stabilize the economic condition in India. Due to Covid-19, CBDT has reduced the TDS/TCS rate by 25% through press release dated 13/05/2020.However, No official notification is being released by CBDT till now for reduction of TDS/TSC rate. NEW DELHI: The Centre’s move to reduce the rate of tax deducted at source (TDS) and tax collected at source (TCS) by 25% is aimed at ensuring more funds for … In order to provide more funds at the disposal of taxpayers for dealing with the economic situation arising out of COVID-19 pandemic, rates of TDS for the following non-salaried specified payments made to non-residents have been reduced by 25% for following non-salaried specified payments. As per the notification, TDS on insurance premium payment has been reduced from 5% to 3.75%. However, if the sum remains unpaid  after 30th June, then interest @ 1.5% will be charged. 5000 x 1% p.m. x 2 months = Rs. This relief shall not be available to a salaried and non-resident taxpayer. Fees paid to Professional & Technical Service (FTS),Royalties etc. Interest will be levied at 1% for every month or part of a month for delay in deduction of tax and at 1.5% for every month or part of a month for delay in remittance of tax after deduction. The total interest amount payable will be Rs. If you are looking for one, the article New reduced TDS Rate for Fy 2020-21 | Impact On The Tax Liability here will help you to get all the required information. 8 If your interest rate increases so that the monthly payment does not cover the interest amount, you will be required to adjust your payments, make a prepayment or pay off the balance of the mortgage. It does not constitute professional advice or recommendation of firm. Considering the pandemic and resultant lockdown affecting all sectors of the economy, the Government of India has reduced the rates of Tax Deducted at Source and Tax Collected at Source by 25 per cent on several transactions till March 2021. Therefore, no late fee for Quarter-4 of FY 2019-20 will be charged if TDS return is filed by 30th June, 2020. Non-deposition of TDS: For non-deposition of TDS on time, interest @ 1.5% per month will be charged from date of deduction of TDS till date of payment of TDS. For example, if the tax is required to be deducted at 20% under section 206AA of the Income-tax Act due to non-furnishing of PAN/Aadhaar, it shall be deducted at the rate of 20% and not at the rate of 15%. The contents of this article are solely for informational purpose. As part of the initiative in improving liquidity owing to the COVID crisis, it has been announced that TDS / TCS rates for non-salary payments will be reduced by 25% across the board. And, also there would be … Note: TDS return filing is possible only after paying the interest. 7 Fixed rates are expressed as if calculated semi-annually, not in advance. Payment for contract, professional fees, interest, rent, dividend, commission, brokerage etc is eligible for this reduced rate of TDS, Sitharaman said. However, if the sum remains unpaid after 30th June, then interest @ 1.5% will be charged. Interest @ 1.5% is liable to be paid from the date on which the TDS amount was deducted and not from the date the TDS payment was due. Variable rates change when the TD Mortgage Prime Rate changes monthly, not in advance. Conclusion. Kindly note that a cut in TDS rate does not mean a reduction in your tax liability. This concession in the rate shall be available for the tax deducted or collected between 14-05-2020 till 31-03-2021. Register / Track PAN Card Related Complain / Status, Fees and Penalty for Late Filing of TDS Returns, Steps for filing Rectification request on receipt of demand notice due to mis-match of Income Tax, TDS/TCS Rates Chart for A.Y. How will transactions of more than one buyer/seller be filed in Form 26QB - TDS on immovable property? Alongside, the rent crossing the amount of Rs 50,000/month TDS will be charged at the rate of 3.75% reduced from the earlier rate of 5%. On detailed analysis, I come to know that CBDT has reduced the TDS/TCS rate in most of cases but not in all cases as explained in my compilation. (iii) Payment of such Tax or Levy should be paid on or before 30 th June, 2020 (or such other date as the Central Govt may notify). The finance minister today has announced the 20 Lakh crore stimulus package in which it was announced that the current TDS rates shall be reduced by 25% from tomorrow till March 31 2021. 0.75% per month instead of 1/1.5 percent per month) will be charged for this period. TDS Rate Chart for FY 2020-21 Pre & Post 14th May 2020, 2. Q5. How to Download TDS Certificate in Form 16B? In case any delay in tax deduction or short- Deduction the rate of 1% is levied on the fixed chargeable amount. TDS rates AY 2021-22 (FY 2020-21) Revised / Reduced w.e.f 14/05/2020 for SALARY and OTHER THAN SALARY payments to all Resident and Non-Resident assessees TDS on Dividend and interest and rent for immovable property has been reduced from 10% to 7.5%. No late fee/penalty shall be charged for delay relating to this period. Interest other than interest on securities, Payment of Contractors and sub-contractors, Payment in respect of life insurance policy, Payments in respect of deposits under National Savings Scheme, Payments on account of re-purchase of Units by Mutual Funds or UTI, Commission, prize etc., on sale of lottery tickets, Payment for acquisition of immovable property. Payment based on the deposit under national saving scheme, 25%- for payment made to Individuals/HUF30%- For payment made to others, 18.75%- for payment made to Individuals/HUF22.5%- For payment made to others, Compensation payment on acquisition of immovable property, Payment to commission, brokerage etc. As per sub-section (1H), every seller of goods, who receives consideration or aggregate of consideration for sale of goods exceeding INR 50 Lacs in any year, shall collect TCS @ 0.1% of sales consideration from buyer for amount exceeding INR 50 Lacs. The assessee fails to deposit the TDS by 7th July. Further reduction in rate of Tax Deduction at Source (TDS) & Tax Collection at Source (TCS) In order to provide more funds at the disposal of the taxpayers for dealing with the economic situation arising out of COVID-19 pandemic, the rates of Tax Deduction at Source (TDS) for the following non-salaried specified payments made to residents has been reduced by 25% for the period from 14th … Getty Images. In the press conference held on May 13, 2020 the Finance Minister, Smt. TDS rate: Salary As per applicable income tax slab ... date it is finally deducted (1%) or paid (1.5%) to the government in the case of tax deducted at source. Additionally, there was a 1% TDS charge applicable on payment for the acquisition of immovable property which is now reduced to 0.75%. No filing or late filing of TDS/TCS return can take you into a wholesome of troubles. Dividends accumulated from mutual fund investments, shares. What is a Certificate of Nil/Lower Rate of TDS for Lower TDS deduction rate? This would be for all payments from 14th May 2020 to 31st March 2021. Here is how it will work in 7 FAQs 01.01.2021, Auto population of E-Invoice details in GSTR-1/2A/2B/4A/6A, Online communication on GST portal | Facility between Supplier and Recipient, Uploading Show Cause Notice and Order on GST Portal is Mandatory | SCN and order sent via email only is invalid, Analysis of New RBI Monetary Policy, 2020 & few recent changes by RBI, TCS on sales of Goods| Section 206C(1H)| Applicable with effect from 01.10.2020, Time Limit to Deposit TDS/TCS Liability: Late Fee, Penalties. Therefore, even after issuance of a press release, in case of non-furnishing of PAN, TDS will be deducted at the rate of 20% not at the reduced rate of 15%. As part of the initiative in improving liquidity owing to the COVID crisis, it has … by Individual and HUF, (d) Any other forest produce not being timber/tendu leaves, (f) Minerals, being coal or lignite or iron ore, Grant of license, lease, etc. Save your time and get all new posts and updates delivered to you in your Mailbox, Sections under which interest for various delays/ defaults need to be paid, Levy u/s 234E of the Income Tax Act, 1961 is a statutory levy and cannot be waived. The table of existing & new reduced TDS rates is as under: 4. As we have already mentioned that it is mandatory to deduct TDS by the person who is making payment and deposit to the Government. 1.5% (FTS, certain royalties, call centre), Payment of Compensation on acquisition of immovable property, Payment to commission, brokerage etc. The reduced TDS and TCS rate will be for specific payments such as payment for a contract, professional fees, interest, rent etc. As per the press release, the TCS rates will be reduced by 25% on the items such as sales of scrap materials, timbers, tendu leaves, forest products and on mineral resources-  coal, ignite etc. Part of the month is taken as the whole month. of(a) Parking lot. Thus, it is important that one fulfills their tax obligations in a timely manner. Fee for Professional or Technical Services (FTS), Royalty, etc. TDS interest for late payment As per the guidelines of the press release, here’s the details of the reduced tax rates of Tax Deduction Source (TDS) & Tax Collection Source (TCS) on non-salaried payments: TDS levied on bank’s fixed deposit interest will be deducted at the rate of 7.5% instead of earlier rate of 10%. The Hon’ble Finance Minister Nirmala Sitharaman has announced the reduction in the rates of TDS & TCS as a part of the stimulus of 20 Lakh crore economic package amidst the lockdown situation in India. For TCS, the rate of interest remains at 1%. Update as on 14 May 2020 . The TCS and TDS Rate for Fy 2020-21 is reduced by 25% for the non-salaried defined payments  made to residents for the period of 14th May, 2020 to March 31st, 2021. 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