Finance Minister Nirmala Sitharaman announced a slew of measures in the first tranche of the Rs 20 lakh crore package. Among a host of announcements, the Finance Minister, in a huge relief for taxpayers, said that the due date of all income tax returns for FY 2019-20 will be extended from July 31 & October 31 to November 30. Tax audit date will also be extended to October 31. Moreover, the date of assessments getting barred on September 30 will be extended to December 31 and those getting barred on March 31, 2021 will be extended to September 30, 2021.
Calling it a timeline and a procedural kind of relief, Suresh Surana, founder, RSM India feels this will definitely help everybody prevent undue stress since most offices are unable to operate or are not fully functional. Additionally, the government has given time up to June 30 for investments under section 80c avenues so until June 30 the final tax liability cannot be computed and employers will have to issue tax deduction at source (TDS) certificate only once they know the final tax liability, he added. Normally the TDS returns would get filed by March 31 or April 30 but this time it will happen by June 30. July 30 would then anyway be too short a period, considering that a bulk of taxpayers come under this category, which is why this extended timeline would be a huge relief for a large number of taxpayers.
More than one-third of country's gross tax receipts (without reducing refunds) is collected through TDS, however, the share of advance taxes was the highest, close to 41 per cent in 2018/19
The minister also announced that the rates of tax deduction at source (TDS) for non-salaried specified payments and tax collection at source (TCS) for specified receipts will be reduced by 25 per cent. Payment for contract, professional fees, interest, rent, dividend, commission, brokerage would be eligible for this reduced rate of TDS and the measure will release liquidity of Rs 50,000 crore.
Other direct tax measures include immediate issue of all pending refunds for charitable trusts and non-corporate businesses and professions, including proprietorship, partnership, LLP and co-operatives.