The Central Board of Direct Taxes on 13th May 2020, has notified reduction in the rate of tax deducted at source (TDS) and tax collection at source (TCS) by 25%. This reduction shall be applicable for the remaining part of the financial year 2020-21, starting May 14th, 2020 till March 31, 2021.
The rate of TDS ranges between 1% and 30% depending on the source of income, while the rate of TCS ranges between 0.10% and 5%.
Further TDS on the amount paid or credited during the period from 14th May 2020 to 31st March 2021 shall be deducted at the reduced rates and the tax on the amount received or debited during the period from May 14, 2020, to March 31, 2021, shall be collected at the reduced rates and there shall be no reduction in rates of TDS or TCS, where the tax is required to be deducted or collected at a higher rate due to non-furnishing of PAN/Aadhaar.
For example, if the tax is required to be deducted at 20% under section 206AA of the Income-tax Act due to non-furnishing of PAN/Aadhaar, it shall be deducted at the rate of 20% and not at the rate of 15%.
Click here to read the Notification.
