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As part of the economic stimulus amid the coronavirus, FM Nirmala Sitharaman announced that the deadline for filing all tax returns was extended from July 31 to November 30.
It also announced that the TDS, TCS rate for non-salaried payments for the period through March 31, 2021 has been reduced by 25%, a measure that will release ₹Rs 50 billion in the system, he said.
“In order to make more funds available to taxpayers, the source tax deduction rates (TDS) for specific non-salaried payments made to residents and the source tax collection rates (TCS) for specified receipts will be reduced by 25% from existing rates, “said the finance minister.
Payment by contract, professional fees, interest, rentals, dividends, commissions, brokerage, etc. they will be eligible for this reduced TDS rate.
In other personal finance announcements made Wednesday, the employer’s legal PF contribution has been reduced to 10% from the previous 12%, a measure slated to provide ₹Rs 6.75 billion in liquidity relief.
The decision to reduce the legal deductions from the Employee Provident Fund (EPF) for employers and employees to 20% over the next three months will benefit around 650,000 companies and 4.3 million employees.
Currently, employees and employers deposit 24% – 12% each of their base salary and housing allowance as EPF deductions each month. The measure will have a double benefit: reduced employee cost for employers and 2% more net salary for employees.
However, central public sector companies and state UPMs will continue to pay 12% of the employer share, while employees will pay 10%, the finance minister added.
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