FM extends I-T return filing deadline till Nov 30; TDS, TCS slashed by 25% till March '21

In a big relief to taxpayers, Finance Minister Nirmala Sitharaman has announced the extension of the deadline for filing Income Tax returns from July 31 and October 31 to November 31, 2020. TDS (Tax Deduction at Source) and TCS (Tax Collection at Source) rate for non-salaried payments for a period up to March 31, 2021, has also been slashed by 25%, a move that will release ₹50,000 crores into the system.

Unveiling the first tranche of a massive stimulus package pledged by the Modi government to rescue the Indian economy from the devastating fallout of the pandemic, Sitharaman announced direct tax measures aimed to ensure liquidity among taxpayers to sustain through the crisis. Other than extension of the I-T filing deadline, the Ministry has also extended the deadline for tax audit from September 30 to October 31, 2020.

This, given to the fact that many taxpayers are caught in the middle of a steep economic downturn due to the Coronavirus pandemic and the subsequent lockdown which halted economic activities for nearly seven weeks. Massive job losses in both the formal and informal sectors have already happened and are only expected to rise further.

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TDS, TCS rate cut

Briefing reporters on Wednesday, FM Sitharam said, "In order to provide more funds at the disposal of taxpayers, the rates of TDS for non-salaried specified payments made to residents and rates of TCS for the specified receipts shall be reduced by 25% of the existing rates." 

Payment for contract, professional fees, interest, rent, dividend, commission, brokerage, etc shall be eligible for this reduced rate of TDS, she said.

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Other measures

Nirmala Sithraman also announced that all pending refunds to charitable trusts and non-corporate businesses and professions including proprietorship partnership, LLP (Limited Liability Partnership) and Co-operatives shall be issued immediately. 

The date for making payment without any interest and penalty under the “Vivad Se Vishwas” scheme will be extended from June 30 to December 31, 2020. The scheme was announced in this year's Union Budget to settle tax disputes between individuals and the income tax department.

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(with inputs from agencies)