The key Direct tax changes as announced by the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman on May 14, 2020 under ‘Aatmanirbhar Bharat Abhiyaan’ to support Indian economy in fight against COVID-19 are as follows:
- Tax Deduction at Source (‘TDS’) and Tax Collection at Source (‘TCS’) rates reduced:
- TDS rates for non-salaried specified payments made to residents and rates of TCS for the specified receipts shall be reduced by 25% of the existing rates;
- Payment for contract, professional fees, interest, rent, dividend, commission, brokerage, etc. shall be eligible for this reduced rate of TDS; and
- This reduction shall be applicable for the remaining part of the FY 2020-21 i.e. from May 14, 2020 to March 31, 2021.
- All pending refunds to charitable trusts, non-corporate businesses, professions including proprietorship, partnership, LLP and Co-operatives shall be issued immediately;
- Due date of all income-tax return for FY 2019-20 will be extended from July 31, 2020 and October 31, 2020 to November 30, 2020;
- Due date for tax audit extended from September 30, 2020 to October 31, 2020;
- Date of assessments getting barred on September 30, 2020 extended to December 31,2020 and those getting barred on March 31,2021 will be extended to September 30, 2021; and
- Period of Vivad se Vishwas Scheme for making payment without additional amount will be extended to December, 31 2020.
Please note that the legislative amendments for the above proposals through an ordinance are yet to be notified. For more information please click the PDF Link below-: