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. 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%. 100. In the press conference held on May 13, 2020 the Finance Minister, Smt. Further, the rate of Tax Collection at Source (TCS) for the following specified receipts has also been reduced by 25% for the period from 14th May, 2020 to 31st March, 2021:-, TCS Rate Chart for FY 2020-21 Pre & Post 14th May 2020. Therefore, TDS on the amount paid or credited during the period from 14th May, 2020 to 31st March, 2021 shall be deducted at the reduced rates specified in the table in para 1 above. Kindly note that a cut in TDS rate does not mean a reduction in your tax liability. TDS, TCS reduced by 25%. The TDS rates for payment to residents other than Salary, and tax collected at source rate will be reduced by 25 percent of the specified rates for the remaining period of … of(a) Parking lot. Latest TDS Rates FY 2020-21 (Assessment Year 2021-22). Payment for contract, professional fees, interest, rent, dividend, commission, brokerage etc is eligible for this reduced rate of TDS, Sitharaman said. In case any delay in tax deduction or short- Deduction the rate of 1% is levied on the fixed chargeable amount. Q5. This relief shall not be available to a salaried and non-resident taxpayer. 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. Finance Minister Nirmala Sitharaman announced this in a press conference dated May 13, 2020. Here is how it will work in 7 FAQs 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. 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 … 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. Thus, option (c) is the correct option. As part of the initiative in improving liquidity owing to the COVID crisis, it has … 1.5% (FTS, certain royalties, call centre), Payment of Compensation on acquisition of immovable property, Payment to commission, brokerage etc. However, if the sum remains unpaid after 30th June, then interest @ 1.5% will be charged. Blog » Income Tax » TDS » New reduced TDS Rate for Fy 2020-21 | Impact On The Tax Liability. 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. For example: TDS was deducted on 25th June and the due date for TDS Payment was 7th July. Update as on 14 May 2020 . Note: TDS return filing is possible only after paying the interest. Click here to Download TDS/TCS Rate Chart in PDF File. Interest rate of 1.5% has been reduced to 0.75% for due dates falling between 20th March, 2020 to 29th June, 2020. Due to the nationwide lockdown for Covid-19 pandemic, liquidity flow and the business activities were jeopardized. 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. Similarly, the tax on the amount received or debited during the period from 14th May, 2020 to 31st March, 2021 shall be collected at the reduced rates specified in the table in para 2 above. The CBDT said TDS on payment for life insurance policy has been reduced to 3.75% from the 5% earlier, while that on dividend and interest as well as rent for immovable property has been cut to … 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 However, all the penalty provisions has been dispensed for the period of 20th March, 2020 to 30th June, 2020. 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. TDS interest for late payment Finance Minister Nirmala Sitharaman last week announced the rates of TCS for specified receipts and TDS for non-salaried specified payments made … TDS Rate ( % ) TDS: Surcharge: Health & Education Cess: Total TDS deductible: TDS is deductible if amount exceed: TDS Calculator for payment of Salary & Wages during AY 2021-22 . 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. The assessee fails to deposit the TDS by 7th July. As per the notification, TDS on insurance premium payment has been reduced from 5% to 3.75%. For TCS, the rate of interest remains at 1%. No late fee/penalty shall be charged for delay relating to this period. 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. 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. One of the announcements was related to payment of taxes including payment of TDS.In was announced that for delayed payments of advance 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. This concession in the rate shall be available for the tax deducted or collected between 14-05-2020 till 31-03-2021. Fee for Professional or Technical Services (FTS), Royalty, etc. Interest received apart from the security i.e Interest on Fixed deposit, Payment accumulated from Life insurance policy, Payments associated with repurchase of units by the UTI & Mutual funds, Commission based on Lotteries, prizes on games, Payment levied on Sub-contractor & contractor, 1% – for payments made to Individual/HUF2% – For payment made to others, 0.75% for payments made to Individual/HUF1.5% – for others, Payment for purchase of immovable property, Payment levied on rent of immovable propoerty by Individual or HUF(Crossing Rs50,000/month). 201 ( 1A ), Royalty, etc filing of TDS for Lower TDS deduction rate note: return. Due to the TDS by 7th July is the correct option in the rate shall be for. 206C, Sub-section ( 1H ) has been reduced from 10 % to 3.75 % option ( c ) the... Rates for Financial Year 2020-21 and Assessment Year 2021-22 ) 2020-21 ( Assessment 2021-22... 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