Union Finance Minister Nirmala Sitharaman announced relief for middle classes too today as part of the government's efforts to address the financial crisis brought on by the coronavirus-induced lockdown, which is in its seventh week. To allow people more cash in hand, the government has offered a 25 per cent reduction in TDS (Tax Deduction at Source) for non-salaried specified payments and TCS (Tax Collection at Source) for specified receipts, Ms Sitharaman said while outlining the contours of the 20 lakh crore financial package announced by Prime Minister Narendra Modi yesterday.
This will apply to payment for contract, professional fees, interest, rent, dividend, commission, brokerage, the minister said. The measure will come into force tomorrow and last till the end of the financial year -- March 2021 -- and provide a liquidity of Rs 50,000 crore.
As part of other direct tax measures, all pending refunds to charitable trusts and non- corporate businesses and professions including proprietorship, partnership, LLP and Co-operatives shall be issued immediately, the government said.
Due date of all income-tax returns for the financial year 2019-20 will be extended from July 31, 2020 and October 31, 2020 to November 30, 2020 and Tax audit from September 30, 2020 to October 31, 2020.
The date of assessments getting barred on September 30, 2020 will be extended to December 31, 2020 and those getting barred on 31st March, 2021 will be extended to September 30, 2021.
The period of "Vivad se Vishwas" Scheme for making payment without additional amount will be extended to December 31, 2020, the minister said.
In the first of her several addresses to unveil the package, Ms Sitharaman announced 15 different measures today, which involved MSMEs (Micro, Small and Medium Enterprises), NBFCs (Non-Bank Financial Companies), MFIs (Micro Finance Institutions), Provident Fund, Real Estate and Taxation.
The big takeaways from today's session include collateral-free automatic loan worth 3 lakh crore for MSMEs, the bar on global tenders upto Rs 200 crore, a reduction in the employers' contribution for Employees Provident Fund, Rs 90,000 crore one-time Infusion of liquidity for discoms and an extension of upto six months for contractors working with the Central government.