TDS and TCS rates reduced by 25 %; Due date for filing income tax returns extended up to November 30

Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) have been reduced by 25 per cent till March 31, 2021. The decision was announced on Wednesday by Finance Minister Nirmala Sitharaman.

This decision will increase the cash flow of over Rs 50,000 crore benefitting common people. The date for filing Income Tax return for the last financial year has also been extended till November 30, 2020, while the last date for filing tax audits has been extended from September 30, 2020, to October 31, 2020.

Finance Minister also announced the reduction of statutory provident fund contribution by both employers and employees to 10 per cent of basic wages from the existing 12 per cent for the next three months. The decision has been taken to facilitate more take-home salary for employees and give relief to employers in payment of PF dues, resulting in liquidity ease of Rs 6,750 crore.

The decision will be applicable to all the establishments covered under the Employees' Provident Fund Organisation (EPFO).

Besides, Ms Sitharaman also announced the extension of another scheme under the Pradhan Mantri Garib Kalyan Package (PMGKP) for three months till August 2020.

Under it, the government would contribute entire 24 per cent of PF contributions till August. Under the PMGKP, payment of 12 per cent of employer and 12 per cent employee contributions were made into EPF accounts. The total benefits accrued is about Rs 2500 crore to 72.22 lakh employees.

Ms Sitharaman announced a sum of Rs 30,000 crore for Non-Banking Financial Companies (NBFCs), Housing Finance Companies (HFCs) and Micro Finance Institutions (MFIs) under a special liquidity scheme. Further, Rs 45,000 crore partial credit guarantee scheme 2.0 was also unveiled for NBFCs, HFCs and MFIs with low credit rating to help them extend loans to individuals and MSMEs.

Providing relief to the construction companies, Central agencies like Railways, Ministry of Road Transport and Highways and Central Public Works, has been asked to grant an extension of six months for completion of work covering construction and other related contracts.

In a relief to real estate developers, Finance Minister Nirmala Sitharaman also informed that the deadline for completion of projects will be extended by up to six months, treating the coronavirus, COVID-19, outbreak as an event of 'force majeure' under the realty law RERA. Finance Minister informed that the Urban Development Ministry will issue advisory to all the States and Union Territories to treat Covid-19 period event as force majeure. The move will benefit the real estate sector and agencies which have been entrusted to complete civil work.