Revised TDS/TCS Rate Applicable As Per Covid Economic Relief Package Applicable For All Kinds Of Payments W.E.F. 14th May 2020.

Union Minister of Finance & Corporate Affairs Smt. Nirmala Sitharaman has announced today Reduction in Rates of Tax Deduction at Source (TDS) and ‘Tax Collected at Source (TCS). 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 FY 2020-21 i.e. from 14.05.2020 to 31.03.2021.

Though, in the speech by the Hon. Finance Minister, she mentioned that TDS rates shall be reduced on all types of payments made, a press release by the Government late night has given the list of Sections where the reduced rates are applicable. The TDS will be continued to be charged at original rates on all other sections as also to all payments made to non-residents.

TDS/TCS Rate

TDS Rate Chart for F.Y. 2020-21 (A.Y: 2021-22) after considering changes w.e.f. 14.05.2020

Kindly Note amended rates are been given on the basis of PIB Notification dated 13.05.2020 and on the date of Publication of this post no notification in this regard is been notified by the CBDT. Press release can be accessed at the following link-  https://pib.gov.in/PressReleasePage.aspx?PRID=1623745

Section Nature of payment Threshold Limit Till 13/05/2020 From 14/05/2020
Resident Non-resident* Resident Non-resident*
Rs. TDS Rate (%) TDS Rate (%) TDS Rate (%) TDS Rate (%)
192 Salaries Normal slab rate Normal slab rate Normal slab rate Normal slab rate
192A Premature withdrawal from EPF 50000 10 10 10 10
193 Interest on securities – 8% Savings (Taxable) Bonds, 2003 or 7.75% Savings (Taxable) Bonds, 2018 during the financial year 10000 10 0 7.5 0
193 Interest on securities – Interest on securities for money issued by or on behalf of any local authority/ statutory corporation, listed debentures of a company (other than demat form), any other interest on securities Rs. 5000 in case of Individual 10 7.5
194 Dividends 5000 10 7.5
194A Interest (Banking co., co-operative society engaged in banking, post office) 50000 10 7.5
194A Interest (Any other person) 5000 10 7.5
194B Winning from lotteries 10000 30 30 30 30
194BB Winning from Horse race 10000 30 30 30 30
194C Contractor-Single transaction-Individual/HUF 30000 1 0.75
-Others 2 0- 1.5
194C Contractor – Consolidated Payment During the F.Y. 100000
– Individual/HUF 1 0.75 0-
– Others 2 1.5
194C Transporter (44AE) declaration with PAN 0 0 0 0
194D Insurance commission – Other than Company 15000 5 0 3.75 0
                     – Company 10 0 7.5 0
194DA Maturity of Life insurance policy 100000 5 0 3.75 0
194E Non-resident sportsmen or sports association NA 20 NA 20
194EE NSS 2500 10 10 7.5 10
194F Repurchase units by MFs 20 20 15 20
194G Commission-Lottery 15000 5 5 3.75 5
194H Commission /Brokerage 15000 5 0 3.75 0
194I Rent of – Plant/Machinery/Equipment 240000 2 0 1.5
        – Land and Building/Furniture & Fixture 10 0 7.5
194IA Transfer of certain immovable property other than agriculture land 50 lakh 1 0 0.75
194IB Rent by Individual/HUF 50000 per month 5 0 3.75
194IC Payment under Joint Development Agreements to Individual/HUF 10 0 7.50 0
194J Professional Fees 30000 10 0 7.5 0
194J Technical Fees (w.e.f. 01.04.2020) 30000 2 0 1.5 0
194J Payment to call centre operator (w.e.f. 01.06.2017) 30000 2 0 1.5 0
194J Director’s fees NIL 10 0 7.5 0
194K Payment of any income in respect of 5000 10 0 7.5 0
(a) units of a mutual fund as per section 10(23D); or
(b) the units from the administrator; or
(c) units from specified company
(w.e.f. 01.04.2020)
194LA Compensation on transfer of certain immovable property other than agriculture land 250000 10 0 7.5 0
(TDS exempted if covered under RFCTLARR Act w.e.f. 01.04.2017)
194LB Income by way of interest from infrastructure debt fund 0 5 0 5
194LBA Income from units of business trust
– interest received or receivable from a special purpose vehicle; or 10 5 7.5 5
– dividend referred to in sub-section (7) of section 115-O 10 10 7.5 10
194LBA Distribution of rental income to unit holders
– Other than Company 10 30 7.5 30
– Company 10 40 7.5 40
194LBB Income in respect of units of investment fund
– Other than Company 10 30 7.5 30
– Company 10 40 7.5 40
194LBC Income in respect of investment in securitization fund
                     – Individual/HUF 25 30 18.75 30
                     – Company 30 40 22.5 40
                     – Other Person 30 30 22.5 30
194LC Income by way of interest by an Indian specified company to a non-resident/foreign company on foreign currency approved loan / long-term infrastructure bonds from outside India 0 5 0 5
194LC Income by way of interest by an Indian specified company on rupee denominated bond / any long-term bonds from outside India, which is listed only on a recognized stock exchange located in any International Financial Services Centre 0 4 0 4
194LD Interest on certain bonds from Govt. securities 0 5 0 5
194M Certain payments by Individual/HUF 50 lakh 5 0 3.75 0
194N Payment of certain amount in cash 1 Crore 2 2 2 2
194N Payment of certain amount in cash (first proviso of section 194N- assessee has not
furnished return for
last 3 assessment years
) if-
20 Lakh
–  Amount is more than Rs.20 lakh but up to Rs. 1 crore 2 2 2 2
–  Amount exceeds Rs. 1 crore 5 5 5 5
194-O Applicable for e-commerce operator for the sale of goods or provision of services facilitated by it through its digital or electronic facility or platform (w.e.f. 01.04.2020) 1 0 0.75 0
195 Income of Investment made by an NRI 0 20 0 20
195 Long-term capital gain
– Under Section – 115E/112(1)(c)(iii)/112A 0 10 0 10
– Any Other Gains 0 20 0 20
195 Short-term capital gain – 111A 0 15 0 15
195 Royalty 0 10 0 10
195 Fees for technical services 0 10 0 10
195 Interest income payable by Govt./Indian concern (other than section 194LB or 194LC) 0 20 0 20
195 Any Other Income – Other than Company 0 30 0 30
– Company 0 40 0 40
196A Income in respect – 0 20 0 20
– of units of a Mutual Fund specified under clause (23D) of section 10; or
– from the specified company referred to in the Explanation to clause (35) of section 10
196B Income from units to an offshore fund 0 10 0 10
196C Income from foreign currency bonds or GDR of an Indian company 0 10 0 10
196D Income of foreign Institutional Investors from securities (not being interest referred to in section 194LD, not being dividend referred in section 115-O, not being capital gain from transfer of securities referred in section 115AD) 0 20 0 20
* TDS rate shall be increased by applicable surcharge and Health & Education Cess.

No Reduction in rate of TDS where the tax is required to be deducted at higher rate due to non furnishing of PAN/ Aadhaar.

TDS rates for Salaried persons and Non Resident Persons shall remain unchanged and old rates shall apply as usual.

The TDS on the amount paid or credited during the period from 14th May 2020 to 31st March 2021 shall be deducted at the reduced new rates as specified in the above table. Similarly the tax on the amount received and debited during the period from 14th May 2020 to 31st March 2021 shall be collected at new rates as specified in the table.

This relaxation only applies to payment made between 14th May 2020 and 31st March 2021. So this will not cover payments made before 14th May 2020.

TCS Rate Chart for F.Y. 2020-21 (A.Y: 2021-22) after considering changes w.e.f. 14.05.2020

Section Nature of payment Till 13/05/2020 From 14/05/2020
TCS Rate (%) TCS Rate (%)
206C Scrap 1 0.75
206C Tendu leaves 5 3.75
206C Timber obtained under a forest lease or other mode 2.5 1.875
206C Any other forest produce not being a timber or tendu leaves 2.5 1.875
206C Alcoholic liquor for human consumption and Indian made foreign liquor 1 1
206C Parking lot, toll plaza, mining and quarrying (other than mining and quarrying of mineral oil, petroleum and natural gas) 2 1.5
206C Minerals, being coal or lignite or iron ore 1 0.75
206C Sale of motor vehicle of the value exceeding Rs. 10 Lacs 1 0.75
206C Remittance out of India under the Liberalized Remittance Scheme of the RBI of the value exceeding 7 Lacs in a financial year 5% (Wef 01.10.2020) 5% (Wef 01.10.2020)
206C Sale of overseas tour programme package 5% (Wef 01.10.2020) 5% (Wef 01.10.2020)
206C Remittance out of India for education under the Liberalized Remittance Scheme of the RBI of the value exceeding 7 Lacs in a financial year 0.5%: Where
remittance is a repayment of loan obtained for the
purpose of
pursuing any
education.

5% In any other
case.

(wef 01.10.2020)

0.5%: Where remittance is a repayment of loan obtained for the purpose of pursuing any education.

5% : In any other case.

(wef 01.10.2020)

206C Sale of any goods (other than goods exported out of India or goods given in the above points) of the value exceeding 50 Lacs 0.1 (Wef 01.10.2020) 0.075 (Wef 01.10.2020)

No Reduction in rate of TCS  where the tax is required to be collected at higher rate due to non-furnishing of PAN/ Aadhaar.

Compiled By M/S. Sanjay Thampy & Associates, Chartered Accountants

Please note article is been amended after publication to give effect to press release issued by Ministry of Finance.

Disclaimer: The contents of this article are for information purposes only and does not constitute an advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up.  The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional. Please refer to the complete Terms & Disclaimer here. Terms & Disclaimer

Author Bio

Qualification: CA in Practice
Company: Sanjay Thampy and Associates
Location: Mumbai, Maharashtra, IN
Member Since: 22 Apr 2020 | Total Posts: 9
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110 Comments

  1. Vimal says:

    Given instruction to service provider – deduct TDS as per new revised rates, but they are deducting OLD rates & replied that “There is no notification issued for deduction of TDS @7.5% instead of 10% in press release”. How we reply to this query???

  2. RAchel says:

    HelloSir,

    What should be the rate of TDS applicable in the below scenario?
    1. Date of invoice 30.6.2020
    2. Old LDC valid till 30.6.2020 @ 6%
    3. Reducted Tax rates effective July 2020 u/s 194J 7.5%
    4. New LDC received valid from 2nd July 2020-31.3.2020 @ 0.15%

  3. Shringar says:

    Sir, I have purchased resale flat in June20 and i have deducted 1%TDS while paying to seller. When i tried to pay TDS in site, its 0.75%. Is TDS is revised? Kindly reply as seller is asking for 0.25% refund. Should i go ahead and refund 0.25%? Or is it like this revision is temporary and i may have to pay 0.25% later? Kindly help

  4. sidhartt gupta says:

    what will be the TDS rate for amount & bookings received through e-commerce website for online tuition/workshops services? For ex:. Website A is taking Bookings & Money from parents and forward 100% amount to proprietorship institute (main service provider).

  5. Basker says:

    Dear sir.. we are making payment for the bus operators for their service provided from september 2019 to November 2019 under section 194c. The bill was in letter pad and no date mentioned , the payment will made in and around June.. what rate of tds should I deduct.. pls reply sir..

  6. Maruthi prasanna s says:

    Invoice Date is 12.05.2020, But Credited In our Books on 18.05.2020 & Payment Also made After 18.05.2020, what is TDS rate New rate? Or Old rate?

  7. renu says:

    sir

    If the supply of goods and vendor’s bill is of date 10 may, but payment is made after 14th may, we should deduct TDS at the old rates as the TDS is deducted on accrual of payment basis, which was before 14th May. This is my opinion. Need your guidance.

    1. CA Sanjay Thampy says:

      If you book the bill in your books of accounts on 10th May, it gets credited to his account on that date. The TDS rate applicable on this date will be applicable.

  8. abhisek Kumar says:

    Sir,
    i have received invoice on dated 18.05.20 but invoice date is 30.04.20 then what is the rate of TDS is applicable

    1. CA Sanjay Thampy says:

      Depends on the date on which you book the invoice in your accounts. If it is as per bill date, then old rate and if it is as per bill received date, then new rate.

  9. manali says:

    Hi,
    pls let me know if Party gives us TDS declaration on Professional fees @ 4% till June 2020. so TDS will deduct as per the new rate or 4% ?

    1. CA Sanjay Thampy says:

      If you have a lower deduction certificate, the rate provided in the lower deduction certificate shall be applicable till it’s validity.

  10. Pandian says:

    Sir the bill date is 13.05.2020 but received 14.05.2020 and booked 14.05.2020 in this case what is the tds rate for contract old or new

  11. Jaspreet Singh says:

    Helo Sir,

    Can you please through some light on the below query.
    TDS rates for a FY is specified in respective Finance Act. Therefore, any changes in TDS rate has to be effected by way of Amendment to that Finance Act. Since Parliament is not in session, hence is expected that the Hon’ble President will cause to issue an Ordinance to give effect to these changes announced by the Hon’ble FM on 13th May 2020 and the Ordinance will come into force from the day it is signed by the President. Para 5 of the Press release clearly mentions that legislative changes are being proposed.

    Therefore, unless Ordinance is promulgated reduced rate of TDS cannot be applied

  12. Vikram says:

    Hi Sanjay
    Just wanted to confirm from you regarding the vendor payment for the service procured in the month of April’2020 and the vendor invoice date was dated 30th of April’2020 but expenses are going to be booked in the books of accounts after 14th of May’2020. In such cases what will be the TDS rates to be deducted from the vendor payment?
    Please suggest.
    Waiting for your quick response. Thank you in advance.

      1. sanjay says:

        What if invoice belongs to Mar20 Invoice date is 31st Mar202 and we have received in Aug 20 then which rate is applicable old or new please revert thank you in advance

  13. Vaishali Soni says:

    Hi Sir, We want to send an emails to all our clients for revised rate of TDS, what should we write in email for better understanding.

  14. Vivek Rathod says:

    Dear Sir,

    if we have pass the provision for audit fees expenses for FY 2019-20 and now we will make the payment after 14th May’20, then TDS rate will be applicable old or new

    1. CA Sanjay Thampy says:

      If you have provided for the audit fees as on 31st March, then the TDS also would have been provided s on 31st March, for the month of March itself. Hence, it definitely has to be at old rates.

  15. CA Ganesh Kumar says:

    What are the consequences of not following the reduced rates of TDS. If I deduct 10% instead of 7.5%, will there be any penal consequences.

    1. CA Sanjay Thampy says:

      Penal consequences will be there if you deduct at lower than prescribed rates or if you deduct at higher rates but deposit at the lower rate.

  16. kumari says:

    If I have raised a bill on 15.5.2020 but PART payment of which has been made before 14.5.2020 then which rate will be applicable? whether whole amount will attract old rate or revised rate? or Previous rate on part payment and revised rate on the rest amount? please clarify

    1. CA Sanjay Thampy says:

      TDS is applicable on payment or credit whichever is earlier. If TDS has already been deducted on the advance payment made before 14th May, then it will be at reduced rate on balance payment. If no TDS is deducted on advance payment, then TDS at reduced rate on full bill amount raised on 15th May.

  17. Shailesh says:

    While the finance ministry has announced these measures, the tax portals like NSDL are yet to update the new rates and are forcing you to apply the old rates even till today when you are making TDS payments esp for TDS on purchase of immovable property or rent. Any idea as to when these would change.

  18. Harshad says:

    Received an invoice dated 5th May 2020. Will be processing for payment on 18th May 2020. Will TDS be applicable as per old or new rates?

    1. CA Sanjay Thampy says:

      If you book the invoice to the credit of the party on 5th May, old rate will apply.
      If you credit the invoice to the party on or after payment date of 18th May, new rate will apply

  19. Prashant K says:

    Sir, Thank you for your reply. Provision for expenses are done on the basis of estimates at the year end (31st March 2020) and accordingly TDS is deducted on such provisions (like out of pocket exp to auditor, which may or may not match with contract amount). Hence, there is possibility of actual expenses may increase or decrease and resultant TDS on the same. In case of increase of expenses, TDS on increased amount will have to be charged at reduced rate and if there is decrease, the TDS deducted at the time of provision will be considered (old rates of TDS) and balance amount will be paid to the vendor. Am I correct?

    1. CA Sanjay Thampy says:

      In such cases, the differential amount (short provision) will be booked as expenses in the year and date of payment/booking of invoice. The rate applicable as on that date will apply to the differential amount. If it is on or after 14th May, then the revised new rates.

  20. Prashant K says:

    Sir, If the TDS deducted in Provision on consultancy charges @ 10% on Rs.10000/- as at 31/03/20 but final invoice received on 14th May 2020 of Rs.15000/-, what will be the total amount of TDS on consultancy charges?

    1. CA Sanjay Thampy says:

      If the work is related to Mar 20 for which the provision was made by you on 31st Mar, and the invoice received now is higher than the provision initially made, ideally the provision needs to be revised and the differential TDS on the marginal amount for Mar 20 needs to be paid now with late payment interest.
      However, if the difference is due to work done after Mar 20, then the provision for the differential amount will be done by you as on 14th May 2020, the date of receipt of the invoice, and the TDS on the differential amount will be deducted at the now revised rate.

  21. Surbhi says:

    The notification did not mention about section- 194D in case of domestic companies. It only talks about section- 194 D in case of individuals.
    What will be the rate of TDS?

    1. CA Sanjay Thampy says:

      You have missed out. The notification and the chart above does mention the original as well as revised TDS rates on payment of commission u/s 194D to individuals and companies as well.
      You may please check.

      1. Surbhi says:

        But as per press release of CBDT dated 13th May, 2020, it only indicates about section-194D insurance Commission- Existing rate of TDS 5% and reduced rate from 14/05/2020 to 31/03/2021 is 3.75%.

    1. CA Sanjay Thampy says:

      Similar to the the liability to have a PAN and file its income tax returns, co-operative societies are also required to deduct tax on several payments made.

  22. Kumari says:

    Sir if i have raised a bill on 15.3.2020 but PART payment of which has been made before 14.3.2020 then which rate will be applicable? whether whole amount will attract old rate or revised rate? or Previous rate on part payment and revised rate on the rest amount? please clarify

    1. CA Sanjay Thampy says:

      Since the raising of bill on 15/03/2020 and the part payment that you mention prior to 14/03/2020 falls in March 20, prior to the notification of these reduced rates, this is not applicable to your payments.

  23. anupam says:

    bill dated 31.03.2020 for works pertaining to march 2020. now processing for payment …will it be the new rate or old one?

    1. CA Sanjay Thampy says:

      If bill is dt. Mar 20, definitely TDS also to be provided in Mar 20 and hence at old rates. Payment made after 14th May is immaterial here.

  24. Venu says:

    Dear Sanjay

    Glad that you are responding to every comment. Can we start applying lower TDS rate based on Press release? Should we not wait till legislative amendment is done?

    1. CA Sanjay Thampy says:

      Dear Venu,
      Thanks for the appreciation. I understand that the queries are because of concern faced and hence I try to respond at the earliest.
      TDS rate change declared now can be considered to the income tax rate/excise duty/GST rates changes declared in Union Budget and gets applicable with immediate effect even before the bill is passed in the parliament. Hence the revised rates to be applied from 14th May without waiting for official notification.

  25. kailash chand says:

    if my bill 31 march 2020 and today done the payment 15.05.2020 what rate application of tds ( old rate or new rate w.e.f 14.05.2020

    1. CA Sanjay Thampy says:

      If the bill is dated 31st Mar 2020, and if it is credited by the party in the books as on 31st Mar only, then TDS is applicable for Mar 20. Hence, old rate of TDS will be applicable.

  26. Rishabh Jain says:

    Hello Sir,

    Will these reduced rates even apply in case where TDS is deducted as per section 197, wherein a reduced rate of TDS is levied ?
    Or will it work as say 194C, 194J r/w 197 so reduced rate will apply?

    1. CA Sanjay Thampy says:

      Section 197 provides for Nil deduction or lower rate deduction based on certificate obtained. If the present reduced rate is lower than the certificate rate, then you can opt not to apply the section 197 rate till such time you apply to the AO to get the lower rate certificate revised.

  27. Krishnan says:

    When the TDS is reduced and tax filing dates are changed but no mention is made on the advance tax payment dates. Hence the TDS reduction will amount to higher payment at the time of advance tax or the incidence of interest will be higher . Please clarify

    1. CA Sanjay Thampy says:

      Reduced rate of TDS as per this package is just to increase the net take home money in the hands today and not to reduce the ultimate tax liability.
      Hence, advance tax has to be correctly calculated considering the actual TDS and balance is required to be paid as per the scheduled dates.

    1. CA Sanjay Thampy says:

      TDS is applicable as on date of credit/booking of invoice or payment made, whichever is earlier. If no advance payment made to invoice dt. 14th May, then new rate will be applicable.

      1. Shweta says:

        No I have not paid any advance but the bill date is 12/05/20 and payment date is 14/05/20 so what will be the TDS rate previous or new ?

        1. Shweta says:

          So as the new tax rate came into effect from 14/05/20 So if the bill comes now for any may20 month & if I have not made any advance payment. I have to deduct from new TDS rate ? Am I right ?

        2. CA Sanjay Thampy says:

          TDS is applicable on the date of credit/booking of invoice or the date of payment whichever is earlier. If bill dt.12th May is booked by you to the credit of the party in your books of accounts on 12th May, the old TDS rate will apply even though payment is made on 14th May

          1. Shweta says:

            So the invoice date is not necessary for TDS if I am booking the entry on 14/05/20 for the invoice date 12/05/20 ? I m correct ?

  28. vikram kandpal says:

    what if my invoice pertain to April 2020 but booking is 14th may 2020? should i deduct TDS @ reduced rate or normal rate?

    1. CA Sanjay Thampy says:

      The period for which work pertains is immaterial unless it pertains to last financial year, where it has to be provided at year end. Otherwise new rate will apply as invoice is dated 14th May

    1. CA Sanjay Thampy says:

      The threshold limit is provided for applicability of TDS. The new rates will apply for payments/credit from 14th May onwards.

  29. Divakaran says:

    TDS on fees is reduced to 7.5 percent, thereby the money come to the consultants hands. But what about the tax burden overall for the financial year. If the tax payer is 20 percent category, whether he has to pay 12.5 per cent taking into account the deduction of 7.5 percent. If it is so, at the end of the year he has to make more tax payments. Would it mean it is only postponement of the tax payment in the instant case. Pl.clarify.

    Regards
    Divakaran

    1. CA Sanjay Thampy says:

      The intention of this provision of reduced TDS rates is to enable higher money in hand today and not to reduce the overall tax liability.

  30. Manish says:

    Hi All,

    Few our vendors have raised today 14/05/ but for which services has already been received..So what @ rate TDS should be deducted…Normal rate or (Normal rate -25% of Normal rate)??

    Your valuable suggestion will be highly appreciated

    1. CA Sanjay Thampy says:

      Since invoice is dated 14th May, the new rates will apply. Unless the work done is pertaining to last financial year which has to be provided in Mar end along with TDS.

  31. KS says:

    HI,
    At what rate TCS on coal is to be charged if party has provided lower rate certificate of 0.80%?? (Because old rate is 1% and new rate is 0.75%)

    Will your reply be different if lower certificate is with 0.20%?

    1. CA Sanjay Thampy says:

      The lower deduction/collection certificate is an option available to you. In case the new revised rates are lesser than than the lower certificate rate, you can ideally opt not to use it. Till such time, you approach the assessing officer to revise the lower deduction certificate as per the new rate.

  32. Ramu says:

    Sir, you mentioned that sec 206 C – TCS @0.1 % on sale of goods > 50 lakhs W.e.f 01.10.2020 – Can share the relevant notification of the same. Actually it is applicable from 01.04.2020 from Finance Act 2020.

  33. Latha says:

    tax collected at source rate will be reduced by 25 percent of the specified rates for the remaining period of FY 20-21 i.e. from 14.05.2020 to 31.03.2020
    i hope this should be till 31.03.2021

  34. himanshu shah says:

    reduced by 25 percent of the specified rates for the remaining period of FY 20-21 i.e. from 14.05.2020 to 31.03.2020.
    Pl. revise to 31.03.2021

  35. PAYEL MUKHERJEE says:

    Hi,
    please change the year in the below mentioned line given for your reference
    (FY 20-21 i.e. from 14.05.2020 to 31.03.2020).
    It will be 31.03.2021

    1. CA Sanjay Thampy says:

      Since, the rate has been officially changed, the revised rate should become the applicable rate for the period for which it is specified. Hence, ideally it should not attract the lower rate deduction certificate. The TDS rates have been changed for everyone by way of the notification and hence specific requirement of obtaining lower rate deduction certificate should not be there.

    1. CA Sanjay Thampy says:

      Press Information Bureau, Delhi has issued a press release by the Ministry of Finance for the same dt.13/05/2020 at 10.30 pm.

  36. CA. M. Lakshmanan says:

    It is a futile exercise by the Ministry of finance and nothing but eye wash. Instead Deduction of 10% of Gross Total Income could have been given, which would have been a great relief for the suffering Income Tax Payers

  37. Rishikant Sharma says:

    Sanjay ji,

    Pls clarify.
    1) Bill dated & received on 15-04-2020. Credited in books and old TDS rates applied. Now making payment on 15-05-2020 then what about tds rate. Whether reduced or old rates to be applied!?

    2) On 31st March 2020, provisions of expenses made in books and old TDS rates applied and deposited. Now on bill receiving how to adjust the difference of tds.

    Thanks in advance..

    1. CA Sanjay Thampy says:

      Dear Rishikant,
      TDS would be applicable as on date of credit or date of payment whichever is earlier.
      For bills booked as on 15/04/2020, TDS rate applicable as on date of credit (i.e. booking of bill) would be applicable.
      For expenses of FY 2019-20, these expenses have to be provided as on 31/03/2020 in the books of accounts, and hence it is to be included in the TDS of March 2020 as per the rate applicable for that month.

    1. CA Sanjay Thampy says:

      According to me, those who have applied and obtained lower deduction certificate will continue to have the lower rates as allowed in the certificate without the slashing of 25% applicable to them. The slashing of the rates is for the normal TDS rates.

  38. Kumar says:

    Hi Sanjay, Thank you for the valued information.

    Could you please let me what percentage of TDS to be ducted if one provided consultancy services for a full month in May -20?

    Do we need to deduct TDS @ 10% till 13-05-2020 thereafter, 7.5% from 14-05-2020 by split into the bill? Is the same theory applies to all the cases such as Contractors/Rent etc..?

    Kindly advice.

    Thank you,
    -Kumar

    1. CA Sanjay Thampy says:

      Dear Kumar,
      The notification says that the lower rate shall apply for all payments made or credited to the books of accounts for the period 14th May 2020 til 31st March 2021. Hence, as per your query, if you have provided services for the full month of May 2020, the TDS rate will depend on when you have raised the invoice or when you have received the payment.
      If you raise the invoice for the whole month after the month is over, then the reduced rate will be applicable. But if you have raised an advance invoice in the beginning of the month, then the old rate would apply.
      Further, if you have received the payment from the party before 14th May, then the old rate of TDS will be applicable.
      It is because TDS is applicable on the date of credit or date of payment, whichever is earlier.

  39. Kumar says:

    Hi Sanjay, Thank you for the valued information.

    Could you please let me what percentage of TDS to be ducted if one provided consultancy services for a full month in May -20?

    Do we need to deduct TDS @ 10% till 13-05-2020 thereafter, 7.5% from 14-05-2020 by split into the bill? Is the same theory applies to all the cases such as Contractors/Rent etc..?

    Kindly advice.

    Thank you,
    -Sravan

  40. MOHITDASARDA says:

    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 percent of the specified rates for the remaining period of FY 20-21.

    1. CA Sanjay Thampy says:

      The FM speech had mentioned all non-salaried payments to residents. However, the press release late in the night issued has specified the nature of payments to which this reduction shall be applicable.

  41. Punit Vohra says:

    As per press release TCS on liquor for human consumption 206C not mentioned.
    Thus TCS old rate 1% shall apply.
    Correct if wrong?

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