25% cut in TDS and TCS rates till 31st of March 2021; Last date for filing of Income Tax return extended till Nov 302 min read

By- Harshita Singh

In a major announcement by Finance Minister Nirmala Sitharaman, Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) have been reduced by 25 percent till 31st March of next year. This decision will increase the cash flow of over 50 thousand crore rupees benefitting common people. The date for filing Income Tax return for the last financial year has also been extended till 30th November, while the last date for filing tax audits has been extended from 30th September to 31st October.

Finance Minister also announced a reduction of statutory provident fund contribution by both employers and employees to 10 percent of basic wages from the existing 12 percent for the next three months. The decision has been taken to facilitate more take-home salary for employees and give relief to employers in payment of PF dues, resulting in liquidity ease of  6,750 crore rupees.

The decision will be applicable to all the establishments covered under the Employees’ Provident Fund Organisation (EPFO).

Besides, Ms. Sitharaman also announced the extension of another scheme under the Pradhan Mantri Garib Kalyan Package(PMGKP) for three months until august this year.

Under it, the government would contribute entire 24per cent of PF contributions till August. Under the PMGKP, payment of 12 percent of employer and 12 percent employee contributions were made into EPF accounts. The total benefits of accrued are about 2500 crore rupees to 72.22lakh employees.

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Ms. Sitharaman announced a sum of 30 thousand crore rupees for Non-Banking Financial Companies, Housing Finance Companies-HFCs, and Micro Finance Institutions under a special liquidity scheme. Further, 45 thousand crore rupees partial credit guarantee scheme 2.0 was also unveiled for  NBFCs, HFCs, and MFIs with low credit rating to help them extend loans to individuals and MSMEs.

Providing relief to the construction companies, Central agencies like Railways, Ministry of Road Transport and Highways, and Central Public Works, have been asked to grant an extension of six months for completion of work covering construction and other related contracts.

In a relief to real estate developers, Finance Minister Nirmala Sitharaman also informed that the deadline for completion of projects will be extended by up to six months, treating the coronavirus outbreak as an event of ‘force majeure’ under the realty law RERA. Finance Minister informed that the Urban Development Ministry will issue advisory to all the States and Union Territories to treat the Covid-19 period event as force majeure. The move will benefit the real estate sector and agencies which have been entrusted to complete civil work.