From May 14, 2020, to March 31, 2021, payment for a contract, professional fees, interest, rent, dividend, commission, brokerage, etc will now attract 25 per cent less Tax Deduction at Source (TDS).
This means if 10 per cent was deducted from your source of income that means now only 7.5 per cent will be deducted from your income. For example, if you had issued a bill of Rs 20,000 and your tax deducted earlier was Rs 2,000; with the revised taxation it will become Rs 1,500. That means early you took home Rs 18,000 but with the revision, you will now get Rs 18,500.
Finance Minister Nirmala Sitharaman in her Wednesday announcement said that 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 per cent of the existing rates. The minister stated through TDS/TCS rate reduction measure around Rs 50,000 crore liquidity is possible.
However, there are still some fine prints in the announcement. So, we need to wait and watch if there are exceptions to this list.
