for non-salaried specified payments and TCS for specified receipts will reduce by 25 per cent of their existing rates to provide more money in the hands of taxpayers.
The reduced TDS
rate will apply to the payment for contract, professional fees, interest, rent, dividend, commission, and brokerage for the remaining part of FY21, that is, from May 14 to March 31. Easing the compliance burden, the government extended the due date for filing income tax return for the financial year 2019-20 from July 31 to November 30. Similarly, the tax audit deadline has been extended from September 30 to October 31.
However, experts pointed out the move will only help taxpayers temporarily, as the tax liability remained the same and the date for advance tax has not been extended. Besides, taxpayers will need to re-work their advance tax liability to be deposited on June 15 — the first instalment.
Naveen Wadhwa, DGM, Taxmann, said the reduction in the rate of TDS/TCS will help self-employed, professionals, and senior citizens earning interest income or rental income. “ However, it should be noted that the relaxation in the rate of TDS/TCS will not have any impact on the ultimate tax liability of a taxpayer. Thus, any deficit in tax liability, due to the reduced rate of TDS/TCS, should be payable through advance-tax instalments. Any short-fall in the deposit of advance-tax will attract interest under Section 234B and 234C,” he said.
Archit Gupta, founder and CEO, ClearTax, said taxpayers will have to exercise caution at the time of payment of self-assessment tax and compute it accurately. “Ultimately, they will pay tax at the rates applicable to them; there's no reduction in tax rates, but only a short-term reduction in the deduction of tax at source," he said.
The finance minister extended the last date of the flagship tax dispute resolution scheme — Vivad Se Vishwas — from June 30 to December 31 to allow more entities to participate in the scheme.
Daksha Baxi, head, International Taxation, Cyril Amarchand Mangaldas, said this will make it possible for litigation-ridden taxpayers to consider their options with greater clarity. This will likely enable more taxpayers to take advantage of the scheme.
The government also announced expediting refunds due to all charitable organisations and other non-corporate taxpayers.
Sitharaman said the income tax department has already cleared refunds worth over Rs 18,000 crore, where the refund due was up to Rs 5 lakh.
No GST figures before June 30
One has to wait for one and a half months more to find out the GST collections even for April. The government did not release the GST collection figures for April on May 1. There was speculation that this was done to hide the record low revenues. Revenue Secretary A B Pandey attributed this to deferment of filing returns to May 5. "Will come to know about GST collections by June 30 only," Pandey said.