CCI Team
Quick Summary
The Finance Minister recently announced various changes to Direct Tax while giving the details of the Economic Package. Various relaxations were given to the taxpayers in the form of extension of the statutory due dates, and reduction in the TDS and TCS rates. After the relaxations were announced by
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FAQ :
The primary goal was to infuse liquidity into the economy, which had been squeezed due to the COVID-19 lockdown, by reducing tax burdens and extending compliance deadlines.
No, the 25% reduction in TDS and TCS rates does not cover all payments. For instance, TDS on salary, cash withdrawals exceeding Rs. 1 crore, and lottery winnings are excluded. Similarly, TCS on overseas remittances and tour packages remain at existing rates.
The definition of MSMEs has been revised to include a composite criteria of both investment and turnover, and the distinction between manufacturing and service enterprises has been removed. The investment limits have also been increased.
For companies and those requiring a tax audit, the ITR filing deadline is extended to 30th November 2020, and the Tax Audit Report filing deadline to 31st October 2020. For others, the ITR filing deadline is extended to 30th November 2020.
The deadline for settling disputes under the 'Vivad se Vishwas' scheme, without additional interest or penalty, has been extended to 31st December 2020.
The relaxation was not extended to salaried individuals to maintain liquidity, as many were unaffected by salary cuts. Additionally, reducing TDS on salaries would have complicated tax computations due to varying individual salaries and slab rates.
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