The Union government on Wednesday announced a reduction in the rate of Tax Deduction at Source (TDS) for the non-salaried specified payments and Tax Collection at Source (TCS) for specified receipts by 25 per cent for the period from May 14, 2020 to March, 31,2021.
A press release from Union Ministry of Finance, Department of Revenue, CBDT said, "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 per cent for the period from May 14, 2020 to March, 31,2021."
"Further, the rate of Tax Collection at Source (TCS) for the following specified receipts has also been reduced by 25 per cent for the period from 14th May, 2020 to 31st March, 2021."
The press release also mentioned the types of specified payments and receipts for which the reduction is made. It also mentioned the reduced rates in percentage after the deduction is applied.
The press release said, "It is further stated that there shall be no reduction in rates of TDS or TCS, where the tax is required to be deducted or collected at higher rate due to non-furnishing of PAN/Aadhaar. For example, if the tax is required to be deducted at 20 per cent under section 206AA of the Income-tax Act due to non-furnishing of PAN/Aadhaar, it shall be deducted at the rate of 20 per cent and not at the rate of 15 per cent. Legislative amendments in this regard shall be proposed in due course."
( With inputs from ANI )