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Intimate Your Employer about Tax Regime You Want To Choose (For FY 2020-2021)

Home >> Blog >> Key Points in Atmanirbhar Bharat Abhiyan For FY 2020-2021 (Applicable from 14th May 2020)

Key Points in Atmanirbhar Bharat Abhiyan For FY 2020-2021
(Applicable from 14th May 2020)

 

Our Prime Minister has announced a Special economic and comprehensive package of Rs 20 lakh crores which is equivalent to 10% of India’s GDP under Atmanirbhar Bharat Abhiyan or Self Reliant India Movement. This package is for various sections including cottage industry, MSMEs, labourers, middle class, industries & others. Bold reforms across sectors will drive the country’s push towards self-reliance & it is time to become vocal for our local products and make them global.

Key points which are related to Individuals and Salary class Taxpayers from above Package are:-

  1. Five crore workers registered under Employee Provident Fund (EPF) to get non- refundable advance of 75% of the amount or three months of the Salary, whichever is lower, from their
  1. To provide more take home Salary to employees and also to give relief to employers in payment of Provident Fund Dues the Statutory PF Contribution of both employer and employee will be reduced to 10% each from existing 12% each for all establishments covered by EPFO for next 3

This scheme will be applicable for workers who are not eligible for 24% EPF support under PM Garib Kalyan Package and its extension. Central Public Sector Enterprises and State PSUs will however continue to contribute 12% as employer contribution.

  1. Issued all the pending Income-Tax Refunds up to ₹5 lakh, immediately benefiting around 14 lakh taxpayers. (In our next blog we will explain this point in detail). 
  1. Relaxation for 3 months for debit cardholders to Withdraw Cash free from any ATMs,
  1. Due date of all Income-Tax Return for FY 2019-20 will be extended from 31st July, 2020 & 31st October, 2020 to 30th November, 2020 and Tax audit from 30th September, 2020 to 31st October,2020.
  1. Date of Assessments Getting Barred on 30th September,2020 extended to 31st December,2020 and those getting barred on 31st March,2021 will be extended to 30th September,2021.
  1. Period of Vivad se Vishwas Scheme for making payment without additional amount will be extended to 31st December,2020.
  1. The last date for filing GST Returns for March, April, May & Composition Returns has been extended to 30th June 2020. Companies which have Less than Rs 5 crore Turnover will not have to pay interest, late fee or penalty. For Bigger companies late fee and penalty will not apply and only interest at a reduced rate of 9% will be charged. The date for Opting for Composition Scheme has also been extended to 30th June, 2020.
  1. For Delayed Payments of Advanced Tax, Self-Assessment Tax, Regular Tax, TDS, TCS, Equalization Levy, STT, CTT made between 20th March 2020 and  30th  June 2020, the Reduced Interest rate at 9% instead of 12 %/18 % per annum (i.e. 0.75% per month instead of 1/1.5 percent per month) will be charged for this period.
  2. The 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% of the existing rates. Payment for contract, professional fees, interest, rent, dividend, commission, brokerage, sale of immovable property etc. shall be eligible for this reduced rate of TDS. This reduction shall be applicable for the remaining part of the FY 2020-21 i.e. from 14TH MAY 2020 to 31st March, 2021. As per the New Directives reduced rates are as below:-

TDS Rate Chart for FY 2020-21 Pre & Post 14th May 2020

S.

No

Section of the Income-tax

Act

Nature of PaymentExisting Rate of TDS

Reduced rate from 14/05/2020 to

31/03/2021

1193Interest on Securities10%7.5%
2194Dividend10%7.5%
3194AInterest other than interest on securities10%7.5%
4194CPayment of Contractors and sub-contractors

1% (individual/HUF)

2% (others)

0.75%

(individual/HUF) 1.5% (others)

5194DInsurance Commission5%3.75%
6194DAPayment in respect of life insurance policy5%3.75%
7194EE

Payments in respect of

deposits under National Savings Scheme

10%7.5%
8194F

Payments on account of

re-purchase of Units by Mutual Funds or UTI

20%15%
9194GCommission, prize etc., on sale of lottery tickets5%3.75%
10194H

Commission or

Brokerage

5%3.75%
11194-I(a)Rent for plant and machinery2%1.5%
12194-I(b)Rent for immovable property10%7.5%
13194-IAPayment for acquisition
of immovable property
1%0.75%
14194-IB

Payment of rent by

individual or HUF

5%3.75%
15194-IC

Payment for Joint Development

Agreements

10%7.5%
16194JFee for Professional or Technical Services (FTS), Royalty, etc.

2% (FTS, certain royalties, call centre)

10% (others)

1.5% (FTS, certain royalties, call centre) 7.5% (others)
17194K

Payment of dividend by

Mutual Funds

10%7.5%
18194LA

Payment of Compensation on acquisition of immovable

property

10%7.5%
19194LBA(1)

Payment of income by

Business trust

10%7.5%
20194LBB(i)

Payment of income by

Investment fund

10%7.5%
21194LBC(1)Income by securitisation trust

25%

(Individual/HUF) 30% (Others)

18.75%

(Individual/HUF) 22.5% (Others)

22194M

Payment to commission,

brokerage etc. by Individual and HUF

5%3.75%
23194-O

TDS on e-commerce

participants

1%

(w.e.f. 1.10.2020)

0.75%

 

TCS Rate Chart for FY 2020-21 Pre & Post 14th May 2020

 

S.

No

Section of the Income-tax ActNature of ReceiptsExisting Rate of TCS

Reduced rate from 14/05/2020 to

31/03/2021

1206C(1)Sale of
(a) Tendu Leaves5%3.75%
(b)Timber obtained under a forest lease2.5%1.875%
(c) timber obtained by any other mode2.5%1.875%

(d) Any other forest

produce not being timber/tendu leaves

2.5%1.875%
(e) scrap1%0.75%
(f) Minerals, being coal or lignite or iron ore1%0.75%
2206C(1C)

Grant of license, lease, etc. of

(a) Parking lot

2%1.5%
(b) Toll Plaza2%1.5%
(c) Mining and quarrying2%1.5%
3206C(1F)Sale of motor vehicle above 10 lakhs1%0.75%
4206C(1H)Sale of any other goods

0.1% (w.e.f 01.10.2020)

0.075%
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