TDS Cut by 25% constituting What It Means For You: Between the Corona crisis and the lockdown, the central government has announced an economic package of Rs 20 lakh crore. This package is being used to revive the sluggish economy. The government has decided to cut tax at source i.e. TDS by 25 percent while giving relief to the employed people. That is, instead of 10% now, 7.5% tax will be levied. This new system has also come into force from 13 May.
Now the question is what is TDS and what and how much will be available to the employed people. TDS is a part of income tax and means ‘tax deducted at source’ ie tax deducted at source. That is, through this, the government deducts tax only on the source of income. TDS is deducted on salary, interest or commission, etc. on an investment.
For example, it means that if a person makes a TDS of thousand rupees, then he now has to pay only 750 rupees. The government has informed that people will get benefit of 55 thousand crores from TDS deduction and this exemption will be applicable till 31 March 2021. It is noteworthy that the Income Tax Department has already extended the date of filling the Form 15H and 15G for the TDS for the current financial year to June 30, 2020.
Explain that the government has cut not only TDS but also 25% on TCS i.e. tax collection at source. At the same time, the last date for filing the income tax return of the last financial year 2019-20 has been extended till November 30.