Giving a major relief to the taxpayers of the country due to the very bad impact of Covid-19 outbreak, the government decided to give relief to the taxpayers. Smt. Nirmala Sitharaman said that 18,000 crores of Income Tax Refund were issued amidst the COVID-19 crisis. The government also announced Rs 50,000 crores liquidity through Tax Deduction and Source (TDS) and Tax Collection at Source (TCS).
Here are the few announcements for Tax reliefs:
Changes in Direct tax:
Tax Relief to Business
The pending income tax refunds to charitable trusts and non-corporate businesses and professions including proprietorship, partnership and LLPs and cooperatives shall be issued immediately.
Tax related measures
Reduction in Rates of ‘Tax Deduction at Source’ and ‘Tax Collected at Source” – The TDS rates for all non-salaried payment to residents, and tax collected at source rate will be reduced by 25 % of the specified rates for the remaining period of FY 20-21.This will provide liquidity to the tune of Rs 50,000 Crore.
Note: This reduction will come into effect from May 14 and will last till March 31, 2021. The payment of contract, professional fees, interest, rent, dividend, commission and brokerage shall all be eligible for the reduced rate.
The due date of all Income Tax Returns for Assessment Year 2020-21 earlier it was 31.07.2020 & 31.10.2020 and now it will be extended to 30 November, 2020.
Similarly, the tax audit due date earlier was 30.09.2020 and will be extended to 31 October 2020.
The date for making payment without additional amount under the “Vivad Se Vishwas” scheme will be extended to 31 December, 2020.
Changes in PF Regulations:
Employees Provident Fund Support for business and organised workers
The government will make EPF contributions of 12% on behalf of the employer and the employee for the month of June, July, and August – 2020. The facility which was already given by the government will now be provided for 3 more months. Total benefits accrued are about Rs 2500 crores to 72.22 lakh employees.
EPF Contribution to be reduced for Employers and Employees for 3 months
The statutory limit for contribution to PF is being reduced from 12% to 10% for employer and employee for the next three months for all registered establishments. This will provide liquidity of about Rs.2250 Crore per month.
Conclusion: The Government of India has announced a few reliefs in taxes. These reliefs were announced with the hope to cope with the uncertainty of the pandemic COVID – 19. These reliefs were announced in the hope of easing out the undetermined situation faced by both the employees and the employers. The government has set forth a lot of relaxations and measures to revive the losses incurred by our Indian Economy.