As the world is going through COVID-19 pandemic, most of the Countries are under Lock Down in the fight against COVID-19. Industries are shut and Government is encouraging the employers to give their employees work from home . The deadly decease has almost has affected the economic growth and per capita income. In this hard times where going to office and working has become very challenging for the people on the one hand and making compliances on time is another issue that the industries may face. Keeping in mind the various difficulties faced by the people, the Government of India has given relaxations under various Acts enforce. Here are the Income Tax relaxations that has been given amid COVID-19 pandemic.
- Reduction in the rates of TDS (Tax Deduction at Source) and TCS (Tax Collection at Source)
CBDT through the Press Release dated 13th May, 2020, has reduced the rates of TDS and TCS to maintain the liquidity of the people keeping in mind the economic situation that has arisen due to the COVID-19 pandemic, here is the complete list of TDS and TCS rates reduction;
Reduction in TDS rates;
| S.No. | Section of Income Tax Act | Existing TDS Rate | Reduced Rate from 14/05/2020 to 31/03/2021 | Nature of Payment |
| 1. | 193 | 10% | 7.5% | Interest on Securities |
| 2. | 194 | 10% | 7.5% | Dividend |
| 3. | 194A | 10% | 7.5% | Interest other than Interest on securities |
| 4. | 194C | 1% (Individual/HUF), 2% (Others) | 0.75% (Individual/HUF), 1.5% (Others) | Payment to contractors and sub-contractors |
| 5. | 194D | 5% | 3.75% | Insurance Commissions |
| 6. | 194DA | 5% | 3.75% | Payment in respect of Life Insurance Policy |
| 7. | 194EE | 10% | 7.5% | Payment in respect of deposits under National Savings Scheme |
| 8. | 194F | 20% | Payment in respect of re-purchase of units by Mutual Funds or UTI | |
| 9. | 194G | 5% | 3.75% | Commission, Prize on sale of lottery tickets |
| 10. | 194H | 5% | 3.75% | Commission/Brokerage |
| 11. | 194-I(a) | 2% | 1.5% | Rent on plant and machinery |
| 12. | 194-I(b) | 10% | 7.5% | Rent of immovable property |
| 13. | 194-IA | 1% | 0.75% | Payment for acquisition of immovable property |
| 14. | 194-IB | 5% | 3.75% | Payment of rent by individual or HUF |
| 15. | 194-IC | 10% | 7.5% | Payment for Joint Development Agreements |
| 16. | 194J | 2%(FTS, Certain royalties, Call centre) 10% (Others) | 1.5%(FTS, Certain royalties, Call centre) 7.5% (Others) | Fee for Professional or Technical Services |
| 17. | 194K | 10% | 7.5% | Payment of Dividend by mutual Funds |
| 18. | 194LA | 10% | 7.5% | Payment of compensation on acquisition of immovable property |
| 19. | 194LBA(1) | 10% | 7.5% | Payment of Income by Business Trust |
| 20. | 194LBB(i) | 10% | 7.5% | Payment of Income by Investment Fund |
| 21. | 194LBC(1) | 25% (Individual/HUF) 30% (Others) | 18.75% (Individual/HUF) 22.5% (Others) | Income by securitization trust |
| 22. | 194M | 5% | 3.75% | Payment of commission, brokerage by individual/HUF |
| 23. | 194-O | 1% (w.e.f 1st October, 2020) | 0.75% | TDS on E-Commerce Participants |
Reduction in TCS Rates;
| S.No. | Section of Income Tax Act | Existing TCS Rate | Reduced Rate from 14/05/2020 to 31/03/2021 | Nature of Payment |
| 1. | 206C(1) | 5% | 3.75% | Tendu Leaves |
| 2. | 206C(1) | 2.5% | 1.875% | Timber obtained under a forest leave |
| 3. | 206C(1) | 2.5% | 1.875% | Timber obtained by any other mode |
| 4. | 206C(1) | 2.5% | 1.875% | Any other forest produce |
| 5. | 206C(1) | 1% | 0.75% | Scrap |
| 6. | 206C(1) | 1% | 0.75% | Minors being coal or lignite or iron ore |
| 7. | 206C(1C) | 2% | 1.5% | Grant of license for Parking Lot |
| 8. | 206C(1C) | 2% | 1.5% | Grant of license for Toll Plaza |
| 9. | 206C(1C) | 2% | 1.5% | Grant of license for Mining and quarrying |
| 10. | 206C(1F) | 1% | 0.75% | Sale of Motor Vehicle above 10 lakhs |
| 11. | 206C(1H) | 0.1% (w.e.f 01.10.2020) | 0.75% | Sale of any other goods |
Note: It is to be noted here that where the Tax has to be deducted at the higher rate due to non furnishing of PAN/Aadhaar, rate of tax remains the same and there is no reduction in the rate.
- Income Tax Return Filing due dates extension
The CBDT has extended the date of filing ITR for the FY 2019-20 for all assesses who were earlier required to file by 31st July to 30th November, 2020, and for assesses who were required to file the ITR and other forms by 30th September to 31st October, 2020.
- Deferment of new section 12AB introduced by Finance Act,2020
The new procedure for approval/registration/notification of certain entities u/s 10(23C), 12AA, 35 & 80G of the Income Tax Act, 1961to 1st October, 2020 from 1st June, 2020