[TDS] Central Government announces reduction in rate of Tax Deduction at Source and Tax Collection at Source

The Central Government has announced a reduction in rate of Tax Deduction at Source (TDS) and Tax Collection at Source (TCS). The move shall be aimed at providing more funds at the disposal of the tax payers for dealing with the economic situation arising out of COVID-19 pandemic.

Also Read: Centre Grants Relaxations To NRIs On ‘Residential Status’ Under Income Tax Act For FY 2019-20

The rate of Tax Deduction at Source (TDS) has been reduced by 25% for the non-salaried  payments made to residents from  May 14 ,2020 to March 31,2021.

The rate of Tax Collection at Source (TCS) has been reduced by 25%  for the period from May 14,2020 to March 31, 2021.

It is clarified that there shall be no reduction in rates of TDS or TCS, where the tax is required to be deducted or collected at higher rate due to non-furnishing of PAN/ Aadhaar.