HomeJAGRUK EMPLOYEESIncome Tax And TDS Relaxation | #20LakhCrore PM Relief

Income Tax And TDS Relaxation | #20LakhCrore PM Relief

Prime Minister, Narendra Modi’s 12th May speech promised a Rs 20 lakh crore package. This package intends to help the working class of the country. Finance Minister, Nirmala Sitharaman, detailed the processing of this relief package for different sectors. One part of it will help revive the business and MSMEs. While another part of this relief fund will help individuals with income tax and TDS. This article discusses the new measures for income tax and TDS relaxation amid the coronavirus lockdown.

TDS and TCS Rates Reduction

  • TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) will see changes from 14th May 2020.
  • The TDS rates for non-salaried individuals made to residents and TCS rates for the specified receipts will see a reduction of 25% of the current rates.
  • This TDS and TCS rate reduction is only applicable to non-salaried individuals and companies. For instance, payment of contract, professional fees, interest, dividend, commission, brokerage, etc. are eligible.
  • The revised TDS and TCS rates will be applicable from 14 May 2020 to 31st March 2021.
  • This measure will release liquidity of Rs 50,000 crore.

Revised TDS/TCS rates

Nature of PaymentBasic Cut off (Rs.)Individual /Company and others New Rate %)Individual /Company and others (Old Rate %)If No Pan or Invalid PAN (Rate %)
192 – SalariesSlab RateSlab RatesSlab Rates30%
192A- Premature withdrawal from
Employee Provident Fund
50000Individual: 7.5% Company: NAIndividual: 10% Company: NA20%
193 – Interest on securitiesIndividual: 7.5% Company: 7.5%Individual: 10% Company: 10%`20%
194 – Dividend other than the dividend
as referred to in Section 115-O
2500Individual: 7.5% Company: 7.5%Individual: 10% Company: 10%20%
194A – Interest other than interest
on securities – Others
40000 (for individual)Individual: 7.5%Individual: 10% Company: 10%20%
194A – Banks (Time deposits)40000 (for individual) 50000 (for Senior Citizens only)Company: 7.5%Individual: 10% Company: 10%20%
194A – Banks (Recurring deposit)40000 (for individual) 50000(for Senior Citizens only)Individual: 7.5%Individual: 10% Company: 10%20%
194A – Deposit in Co-op Banks40000 (for individual) 50000(for Senior Citizens only)Company: 7.5%Individual: 10% Company: 10%20%
194B – Winning from Lotteries10000Individual: 22.5% Company: 22.5%Individual: 30% Company: 30%30%
194BB – Winnings from Horse Race10000Individual: 22.5% Company: 22.5%Individual: 30% Company: 30%30%
194C- Payment to Contractor –
Single Transaction
30000Individual: 0.75% Company: 1.5%Individual: 1% Company: 2%20%
194C-Payment to Contractor –
Aggregate During the Financial year 
100000Individual: 0.75% Company: 1.5%Individual: 1% Company: 2%20%
194C- Contract – Transporter not covered
under 44AE
30000 / 75000Individual: 0.75% Company: 1.5%Individual: 1% Company: 2%20%
194C- Contract – Transporter covered under 44AE & submit declaration on prescribed form with PAN20%
194D – Insurance Commission15000Individual: 3.75% Company: 3.75%Individual: 5% Company: 5%20%
194DA Payment in respect of life insurance policy100000Individual: 0.75% Company: 0.75%Individual: 1% Company: 1%20%
194E – Payment to Non-Resident Sportsmen or Sports AssociationIndividual: 15% Company: 15%Individual: 20% Company: 20%20%
194EE – Payments out of deposits under National Savings Scheme2500Individual: 7.5% Company: 7.5%Individual: 10% Company: 10%20%
194F – Repurchase Units by MFsIndividual: 15% Company: 15%Individual: 20% Company: 20%20%
194G – Commission – Lottery 15000Individual: 3.75% Company: 3.75%Individual: 5% Company: 5%20%
194H – Commission / Brokerage15000Individual: 3.75% Company: 3.75%Individual: 5% Company: 5%20%
194I – Rent – Land and Building – furniture – fittings240000Individual: 7.5% Company: 7.5%Individual: 10% Company: 10%20%
194I – Rent – Plant / Machinery / equipment240,000Individual: 1.5% Company: 1.5%Individual: 2% Company: 2%20%
194IA -Transfer of certain immovable property other than agriculture land50,00,000Individual: 0.75% Company: 0.75%Individual: 1% Company: 1%20%
194IB – Rent – Land or building or both50000 per monthIndividual: 3.75%Individual: 5%20%
194IC – Payment of Monetary consideration under Joint development agreementIndividual: 7.5% Company: 7.5%Individual: 10% Company: 10%20%
194J – Professional Fees for technical services (w.e.f. from 1.4.2020)30000Individual: 1.5% Company: 1.5%Individual: 2% Company: 2%20%
194J – Professional Fees in all other cases30000Individual: 7.5% Company: 7.5%Individual: 10% Company: 10%20%
194K- Payment of any income in respect of Units of Mutual fund as per section 10(23D) or Units of administrator or from a specified companyIndividual: 7.5% Company: 7.5%Individual: 10% Company: 10%20%
194LA – TDS on compensation for compulsory acquisition of immovable Property250000Individual: 7.5% Company: 7.5%Individual: 10% Company: 10%20%
194 LBA (1)- Business trust shall deduct tax while distributing, any interest received or receivable by it from a SPV or any income received from renting or leasing or letting out any real estate asset owned directly by it, to its unit holders.Individual: 7.5% Company: 7.5%Individual: 10% Company: 10%20%
194LB – Income by way of interest from infrastructure debt fund (non-resident)Individual: 3.75% Company: 3.75%Individual: 5% Company: 5%20%
194LBB – Income in respect of investment in Securitisation trust.Individual: 7.5% Company: 22.5%Individual: 10% Company: 30%30%
194LBC- Income in respect of investment made in a securitisation trustIndividual: 18.75% Company: 22.5%Individual: 25% Company: 30%30%
194 LC – Income by way of interest by an Indian specified company to a non-resident / foreign company on foreign currency approved loan / long-term infrastructure bonds from outside IndiaIndividual: 3.75% Company: 3.75%Individual: 5% Company: 5%20%
194LD – Interest on certain bonds and govt. SecuritiesIndividual: 3.75% Company: 3.75%Individual: 5% Company: 5%20%
194M – Payment of Commission, brokerage, contractual fee, professional fee to a resident person by an individual or a HUF who are not liable to deduct TDS under section 194C, 194H, or 194J.50,00,000Individual: 3.75% Company: 3.75%Individual: 5% Company: 5%20%
194N – Cash withdrawal in excess of Rs. 20 Lakh during the previous year from one or more account maintained by a person with a banking company, co-operative society engaged in business of banking or a post office.20,00,000Individual: 1.5% Company: 1.5%Individual: 2% Company: 2% 20%
194N – Cash withdrawal in excess of Rs. 1 crore during the previous year from one or more account maintained by a person with a banking company,co-operative society engaged in business of banking or a post office.100,00,000Individual: 1.5% Company: 1.5%Individual: 2% Company: 2% 20%
194O- Applicable for E-Commerce operator for sale of goods or provision of service facilitated by it through its digital or electronic facility or platform.Individual: 0.75% Company: 0.75%Individual: 1% Company: 1% 20%
195- Payment of any sum to Non-residentHigher of Rate in force or Double Taxation Avoidance Act rate
196B – Income from unitsIndividual: 7.5% Company: 7.5%Individual: 10% Company: 10%20%
196C-Income from foreign currency bonds or GDR (including long-term capital gains on transfer of such bonds) (not being dividend)Individual: 7.5% Company: 7.5%Individual: 10% Company: 10%20%
196D – Income of FIIs from securitiesIndividual: 15% Company: 15%Individual: 20% Company: 20%20%

The TDS on e-commerce participants under Section 194-0 is 1.0% for the duration of 1st April 2020 to 13th May 2020. Furthermore, it will be 0.75% from 14th May 2020 to 31st March 2021.

Thus, the TDS on the amount paid/credited from 14th May 2020 to 31st March 2021 shall be deducted at the reduced new rates, as given in the table above. Similarly, the tax on the amount received/debited from 14th May 2020 to 31st March 2021 shall be collected at new rates as specified in the table above.

In the case where there is no PAN card available, tax is required to be deducted at higher rates. The TDS rates are not reduced due to non-furnishing of PAN or Aadhaar Card.

Due dates for TDS quarterly returns

QuarterPeriodDue Date
Q11 April 2020 – 30 June 202031st July 2020
Q21 July 2020 – 30 September 202031st October 2020
Q31 October 2020 – 31 December 202031st January 2020
Q41 January 2020 – 31 March 202131st May 2021

Due dates for TDS payment

MonthDue date for Government deductorsDue date for other deductors (Company, Individual, HUF etc)
April7th May 20207th May 2020
May7th June 20207th June 2020
June7th July 20207th July 2020
July7th August 20207th August 2020
August7th September 20207th September 2020
September7th October 20207th October 2020
October7th November 20207th November 2020
November7th December 20207th December 2020
December7th January 20217th January 2021
January7th February 20217th February 2021
February7th March 20217th March 2021
March7th April 202130th April 2021

Interest on late payment and late deduction of TDS

As per section 201(1A), interest at the rate of 1% per month or part of the month on amount of TDS from the date of tax was deductible till the date of tax actually deducted shall be charged for late deduction.

Also, for late payment, Interest at the rate of 1.5 % per month or part of the month on amount of TDS from the date of tax was deducted till the date such tax is paid shall be charged.

For delayed payments of advanced tax, self-assessment tax, regular tax, TDS, TCS, equalization levy, STT, CTT made between 20th March 2020 and 30th June 2020, reduced interest rate at 9% instead of 12 %/18 % per annum (i.e. 0.75% per month instead of 1/1.5% per month) will be charged for this period. No late fee/penalty shall be charged for delay relating to this period.

Tax Refunds

  • The Income Tax department had earlier stated that refunds for below Rs 5 lakh will be fast-tracked.
  • This has been fulfilled to benefit 14 lakh taxpayers already.
  • Extension of this to all charitable trusts and noncorporate businesses professions including proprietorship, partnership, LLP and cooperatives will be issued immediately. They will also receive their tax refunds as soon as possible.

Due date extension: return and audit

ParticularCurrent Due DateNew Due Date
Individual Tax Payer and Non Audited firm31st July 202030th November 2020
Audited Taxpayer and Partners of Audited Firm 31st October 202030th November 2020
Tax audit under income tax 30th September 202031st October 2020

A one month difference has been maintained between audit and return dates as usual.

Due date extension: Assessment and Vivad Se Vishwas scheme

  • Date of assessments getting barred on 30th September 2020 has been extended to 31st December 2020. Similarly, those getting barred on 31st March 2021 will be extended to 30th September 2021.
  • Thus, record-keeping for the last three to six months will be necessary for assessment.
  • Period of Vivad Se Vishwas Scheme, for making tax payment without additional amount, will be extended to 31st December 2020. No interest or penalty will be charged.

Watch the detailed video on income tax and TDS relaxation below.

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Heena Siddique
Bibliophile. Turophile. Foodie. Tea enthusiast. Shopaholic. Sitcom addict. Movie buff.

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