Rs 50,000 crores liquidity through TDS/TCS rate reduction
- In order to provide more funds at the disposal of the taxpayers, the rates of Tax Deduction at Source (TDS) for
non-salaried specified payments made to residents and rates of Tax Collection at Source (TCS) for the specified receipts shall be reduced by 25% of the existing rates. - Payment for contract, professional fees, interest, rent, dividend, commission, brokerage, etc. shall be eligible for
this reduced rate of TDS. - This reduction shall be applicable for the remaining part of the FY 2020-21 i.e. from tomorrow to 31st March, 2021.
- This measure will release Liquidity of Rs. 50,000 crore.
- Thus, New Rate of TDS for the period 14.05.2020 to 31.03.2021 as under:
| TDS Section | TDS deducted on | Old Rate | New Rate w.e.f. 14.05.2020 to 31.03.2021 |
|---|---|---|---|
| 194A | Interest | 10% | 7.5% |
| 194C-Company | Contract | 2% | 1.5% |
| 194C-Non-Company | Contract | 1% | 0.75% |
| 194H | Commission or Brokerage | 5% | 3.75% |
| 194I | Rent | 10% | 7.5% |
| 194J | Professional Fees | 10% | 7.5% |